Inheritance tax receipts decreased by £63 million in May

Inheritance tax (IHT) receipts decreased by £63 million in May, according to the latest data from HM Revenue & Customs (HMRC).

The statistics showed that the total IHT receipts for May 2019 were £393 million, which represents a drop from the £456 million that was raised in April 2019, and a year on year decrease of 19 per cent.

However, inheritance tax bills have still increased in the last year, with a record total of £5.4 billion being paid in tax revenue in the financial year 2018/19.

Inheritance tax bills have increased significantly in the last several years, from £2.38 billion in 2009/10, which is an increase of £3 billion in tax revenue. The average IHT bill was nearly £200,000 last year.

Experts believe that probate fees could have had an effect on the fluctuation in rates, with the fees due to be reformed.

The Government announced the changes to probate fees in November 2018, which will see the flat fee system replaced by a tiered system that will result in larger estates paying more in fees.

However, the Government postponed the change, which then saw many families continue with probate and resulted in a significant increase to the March and April figures.

The introduction of the nil rate band (NRB), or IHT threshold, in 2017 saw a substantial reduction in IHT receipts, but the figures have gradually increased since then.

The NRB is the amount up to which an estate has no IHT to pay, and in 2019/20, this figure is £325,000. Any estate which exceeds the limit is then charged 40 per cent in inheritance tax.