Commenting on a £0.5bn year-on-year increase in IHT receipts, Nick Ritchie, Director of Wealth Planning at RBC Wealth Management, said: “The £0.5bn year-on-year increase in IHT receipts comes as no surprise. Rising house prices and investment markets have increased the volume and value of estates caught in the IHT net, and with the Chancellor freezing the nil rate band until 2026, this trend looks set to continue.

“At the same time however, many individuals have brought forward their plans to gift to the next generation amid mortality fears fuelled by the pandemic, and concerns over how the Chancellor might target larger estates in the future.

“One thing is for certain, at just 0.6% of the 19/20 tax take and with an IHT rate of 40%, already among the highest of the OECD countries, targeting IHT won't be the silver bullet to recouping the swelling deficit. Increasing the rate of IHT seems unlikely, but enhancing receipts by removing or reducing reliefs, targeting lifetime gifts or removing the generous capital gain exemption on death, could have a part to play. 

“Individuals might wish to consider implementing their wealth transfer strategy sooner amid current, tried and tested rules, rather than risk being caught out by stricter rules in the future.”