Grieving families paid over £2.8 billion in inheritance tax in the first four months of the tax year, with more and more families being hit.
Official figures show the Treasury earned 9 percent more, or £230 million, between April and July compared with the same period last year.
The feared 40 percent inheritance tax raised £749 million in July, the second highest month ever.
Thousands of middle-class households who have lost a loved one are forced to pay inheritance tax. The threshold above which you have to start paying has been frozen until at least April 2028.
This means that as house prices and asset values rise, more families are forced to pay taxes, a process known as ‘fiscal pressure’.
Chancellor of the Exchequer Rachel Reeves delivers a speech at the Treasury in London on July 8
Official figures show the Treasury raised 9% more, or £230m, between April and July compared with the same period last year.
The first £325,000 of an inheritance is tax-free, but above that, tax is charged at 40 per cent.
This threshold has not been increased since 2009. An additional exemption of £175,000 applies where the family home is left to ‘direct descendants’, such as children or grandchildren.
This is also fixed until 2028.
HMRC collected a total of £82.5bn in taxes last month, the highest ever for the month of July, according to Joe Neal of tax firm Blick Rothenberg.
But the rise in inheritance tax has fuelled rumours that Britain’s most hated tax could be raised as Chancellor of the Exchequer Rachel Reeves seeks to plug a £22bn “black hole” in the government’s finances.
Stephen Lowe of pensions specialist Just Group said: ‘With the Autumn Statement due in two months’ time, it seems inevitable that the Chancellor will at least use her slide rule on inheritance tax to see if this is a way to generate more revenue.
‘We’ll have to wait and see whether Rachel Reeves decides that inheritance tax could work even better for the Treasury.’