Stamp duty and IHT intake muted in August – HMRC
The intake generated by stamp duty since the start of the financial year rose moderately from £6bn to £6.2bn, government data showed.
However, figures from HMRC revealed that intake was slightly down year to date, totalling £9.3bn since the start of the calendar year.
Further, the tax paid in August alone was down both month-on-month and year-on-year. Homebuyers paid £1.2bn in stamp duty during the month, down from £1.4bn in July and lower than the £1.3bn paid in August last year.
IHT intake boosted by £100m
Over April to August, the tax paid through inheritance tax (IHT) came to £3.8bn, a £100m rise on the year before.
In August alone, the receipts for IHT came to £598m, a fall from £868m during the previous month. This was the lowest intake so far this year, excluding January, when £537m was paid in.
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HMRC said the lower receipts in August were probably due to a “timing effect”.
HMRC said the higher receipts would be expected in the future, attributed to higher volumes of wealth transfers following recent liable deaths, a rise in asset values and the government deciding to freeze the tax-free threshold at 2020-21 levels until 2030 and 2031.
Will Hale, CEO of Key Equity Release, said the rise further underlines the case for advisers to be “prioritising efficient intergenerational wealth transfer strategies for all clients – and starting these conversations earlier”.
He said these strategies would increasingly involve the consideration of property wealth.
Hale added: “Later life lending solutions, including products such as modern lifetime mortgages, are becoming a normalised part of financial planning, as the expansion of the equity release market demonstrates with £1.71bn lent in the first half of the year.
“Later life lending products can be a useful tool in both providing a retirement income and/or supporting tax-efficient gifting. A holistic approach is required in order to ensure good outcomes for all customers. Equity release is no longer a last resort, and modern lifetime mortgages are relevant to a broad range of over-55s homeowners, whether as part of intergenerational wealth transfer strategies, boosting retirement income and/or managing debt more flexibly.
“Innovation in the later life lending product landscape means that there are numerous options for advisers to consider. Those that are not qualified in or do not want to advise on products such as equity release still have a responsibility to ensure a broad field of vision and a holistic proposition can be achieved through establishing referral relationships with trusted specialist partners.
“Working with a referral partner can help reduce risk, ensure consistently good outcomes for customers and provide a relatively quick route to expanding a firm’s offering. Given Consumer Duty obligations, advisers can no longer afford to ignore later life lending options, so the decision is whether to write or refer.”
Nick Henshaw, head of intermediaries distribution at Wesleyan, said the rise reinforced the longer-term direction of travel.
“Frozen thresholds, significant wealth tied up in property and forthcoming changes to pensions all mean that inheritance tax is now a reality for many who have never had to consider it before,” he added.
