By using this website, you agree to our use of cookies to enhance your experience.
Graham Awards


HMRC rakes in the cash - is Inheritance Tax hurting property?

A business consultancy is reporting a rise in stamp duty paid by landlords and other home buyers - but is warning that inheritance tax is beginning to be a factor in the housing market.  

Hargreaves Lansdown says overall stamp duty receipts for April 2022 to February 2023 are £18 billion - this is £1.1 billion higher than in the same period a year earlier. 

But it warns that after a strong start to the year, receipts are starting to fall as the housing market slows and stamp duty changes come into effect.


Meanwhile inheritance tax receipts for April 2022 to February 2023 are £6.4 billion - this is £0.9 billion higher than in the same period a year earlier and reflective of a long-term freeze in thresholds.

Hargreaves Lansdown analyst Helen Morrissey says: “Stamp duty receipts started the tax year strongly but have quickly run out of steam as the property market slows dramatically. The cost-of-living crisis has hit our budgets hard and means more people are having to shelve the prospect of buying a new home for the time being. 

“These receipts are up to February and likely relate to sales agreed late last year as the market was starting to unwind the chaos caused by the mini-budget. Added to this, changes to stamp duty will have also had a dampening effect on receipts. 

“We’ve seen mortgage rates come down since then, but they remain higher than many people are used to, and this will likely put them off dipping a toe in the market for now.”

Morrissey continues: “Tax freezes also continue to bite with inheritance tax receipts also higher than this time last year. Thresholds have been held for several years and the rise in asset values, particularly property, that we’ve seen in recent years mean more and more families are being drawn in. 

“Far from being a rich person’s tax IHT is becoming an increasing problem for middle-England, particularly for those in the South of England where property prices tend to be higher. If you can plan for it, then that makes life easier but for those who don’t it can come as a nasty shock at a difficult time.”

The consultancy says that latest Income Tax and National Insurance receipts are £38.1 billion higher than in the same period a year earlier. 

Want to comment on this story? Our focus is on providing a platform for you to share your insights and views and we welcome contributions.
If any post is considered to victimise, harass, degrade or intimidate an individual or group of individuals, then the post may be deleted and the individual immediately banned from posting in future.
Please help us by reporting comments you consider to be unduly offensive so we can review and take action if necessary. Thank you.

  • icon

    Staggering amounts of money spent on supporting illegal immigration, talking in billions at a time! Is Sunak and co barking mad ?

    Ferey Lavassani

    For one minute just think what makes people to risk their lives and get onto a dingy to cross the channel. The economy for capitalism is reliant on wars. We go and bomb the man's country in the name of democracy or if need be finding the "weapons of mass destruction", simply for rubbing them from their natural resources such as oil, gold, diamond, copper ............the list is endless. The West excluding the Irish, have done that for centuries through colonialism and still doing it. Who pays for the war in Ukraine? I pay, you pay. Through higher interest rates and stealth tax called "inflation". Who benefits from this war? Surely not the poor Russian or Ukrainians who pay with their lives. Yes you guess it, BAE, Mc Donald Douglas, Prat & Whitney. In another word the gun runners. And you are worried about 45000 cheap labour that arrived last year? By the way I do not call it illegal immigration and they are not refugees. Only today as we speak, International criminal Court has open a new file on alleged war crimes committed in Afghanistan by British troops. This is the beginning of a mass exodus. We are getting into a very exiting times by collapse of US and European financial institutions.


    Why excuse the Irish?

    UK prisons are full of people with names of Irish origin and I say that as someone who had 3 Irish great grandparents.

    Ferey Lavassani

    The Irish are the only European nation with no colonial past. I respect them for that.


    The Irish, like the Scottish, Welsh and English were all part of the UK until the first quarter of the 20th century and the Irish formed a significant part of the British Army and Royal Navy which helped to keep our colonies under control and prosper prior to independence, which has been disastrous for many former colonies (Zimbabwe?) as well as Ireland itself until it found the EU to subsidise it after leaving the benevolence of the UK.

  • George Dawes

    Along with corporation tax it’s the most unfair tax of all

    Tories have pontificated about removing it but as usual all waffle , labour same

  • icon

    Of course over taxation is hurting property.
    How many of us aren't selling because CGT is far too high?

    How many aren't buying because the extra 3% SDLT means the property simply isn't viable? Especially with higher mortgage interest rates.

    How many are remortgaging their long term properties so they can distribute as much equity as possible to minimise the IHT liability?

    All of these things distort the property market and have unintended consequences.
    If the government focused on creating a fluid housing market, which wasn't distorted by punitive taxation, their VAT receipts would be immense.

    Bill Wood

    Jo I like this bit:
    "How many are remortgaging their long term properties so they can distribute as much equity as possible to minimise the IHT liability? "

    I've thought long and hard about how to reduce the IHT my daughters would be faced with. Until now, the best I could come up with is them asking HMRC for time to pay whilst they sold some property, which of course would seriously bad for the tenants.
    But me taking out mortgages now, and giving my daughters the proceeds, seems a reasonable idea.

    As always, your posts are well worth reading!

  • icon

    I am mitigating IHT by paying off mortgages & then giving away ££ out of income. Immediately out of my estate!


    Paying off £100,000 mortgage would save less than £6000 pa before tax or £4800 net.

    It would take more than 20 years to give the £100000 away that way which could have been given away originally and be out of your estate gradually over the next 7 years instead of paying off the mortgage.

    It also wouldn't stop you continuing to give away thousands each year out of income from that point on, which would be immediately out of your estate.

    Your approach doesn't make sense to me and I agree with Jo's approach.

    I've deliberately kept around £1 million of BTL mortgages as that debt will reduce my estate and save my kids £400k in IHT.

    In property the most effective savings or profits are determined on the date of purchase.

    I bought some properties in my student kids' names originally to give them a tax free rental income as students but the eventual IHT benefits of those purchase decisions will be much higher.

    My kids intend to repeat my strategy when the grandkids are old enough to get their own guarantor BTL mortgages as students or young workers.


    Each to his / her own! Intend to have sold all my properties long before I die & clearing mortgages now suits my purposes. IHT is an avoidable tax & I have no intention of leaving my kids to deal with a complex estate that was my personal choice not theirs or a large IHT bill.

  • icon

    The more tax advice I get the more confused I become. Wasn’t the gifting of lumps of cash to your kids once described as ‘ a gift in kind ‘ and taxable at ?40%


    All these things are far too complicated with too many rules and confusing allowances.
    Isn't the 40% refering to IHT if you happen to die too soon after making the gift?
    I'm not a tax expert but
    I was under the impression that a gift is classed as potentially exempt for the 7 years after it is given. If you're still alive at the 7 year point the gift has disappeared from your estate. There is a taper applied towards the end of the 7 years.

    Anything you give from regular surplus income is immediately exempt. For example I contribute every month to SIPPs for my grandchildren from surplus income so that is immediately exempt and the grandchildren also get the 20% top up from the government. It's kind of crazy because I can't contribute most of that money to my own SIPP because it's classed as unearned investment income, but I can contribute to numerous other people's SIPPs.



    My perception is the same as yours.

    Selling up attracts 28% cgt immediately then up to 40% iht payable by your heirs if you die too soon.

    On the other hand, mortgaging up to release funds to give away only costs the applicable interest and so can avoid both the 28% cgt and 40% iht if done early enough

    My children are aware of and support my strategies to reduce how much the taxman will take. A decent probate lawyer should be able to deal with a well documented estate for under £10k which is a lot less than cgt payable on any property sale even ignoring the risk of paying more iht by not releasing capital early enough.


Please login to comment

MovePal MovePal MovePal
sign up