The government’s inheritance tax (IHT) and capital gains tax (CGT) receipts increased in the first six months of the 2024/25 tax year, HMRC has revealed.

IHT receipts for April 2024 to September 2024 were £4.3bn, an increase of £0.4bn compared to the same period last year.

Meanwhile, CGT receipts for this period are combined with income tax and national insurance contribution receipts into one figure in HMRC’s monthly bulletin, rising by £6.2bn over the same period to £226.8bn.

CGT receipts for July to September 2024 were 16.3 per cent higher than the same period last year, according to Evelyn Partners' analysis.

The new figures come amid widespread speculation of potential changes to CGT and IHT in the upcoming Budget on 30 October, with Evelyn Partners tax partner, Laura Hayward, stating that HMRC’s latest update was unlikely to have any impact on the government’s plans for the Budget.

“But rising tax receipts can tell their own story about what Rachel Reeves is considering for the Budget in order to raise an estimated £35bn, particularly in the case of IHT, CGT, and income tax,” she continued.

“The steady annual rise in IHT receipts has been ingrained in recent years as inflation has dragged more assets and more estates over the frozen nil-rate bands. Any changes aimed at increasing the IHT take beyond this fiscal drag effect are likely to reap outsize results over the coming years as the baby boomer generation reaches average mortality.

“So it’s no surprise IHT is at the centre of Budget speculation again, with firm reports claiming business and agricultural property reliefs will be reformed and the gifting rules revamped.

“It’s not out of the question that the Chancellor could also look at the nil-rate bands (NRB), as the residential NRB has come under criticism for discriminating against those who can’t or don’t want to leave their main property to a direct descendant.”

Quilter Cheviot technical consultant, David Denton, added: “Labour’s first budget is now just over a week away, and rumours around potential changes to IHT have been rife. IHT is a highly emotive issue, and it has been ripe for reform and simplification for many years given it is full of impenetrable and irrelevant details in need of review.

“However, reports that the government could make a quick tax grab by removing the complex but valuable residence nil rate band, or by extending the current seven-year rule to 10 years, could face significant backlash.

“Similarly, the reform or even closure of several tax reliefs such as agricultural and business relief, which were touted when the first rumours of potential budget changes broke, could have the knock-on effect of AIM shares losing their inheritance tax break - a move that would seem entirely at odds with a government looking to drive growth and investment in UK assets.

“If reports are true and Labour opts to make IHT more punitive, it could choose to balance this by modernising gifting laws. Simplifying the IHT regime and increasing the annual gifting exemption could ease the complexity of transferring assets and help families pass wealth on during their lifetime. Raising the gifting timescale would encourage earlier wealth transfer, potentially boosting consumer spending.”

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