Millions born between 1945 and 1964 face HMRC tax raid under Labour

A new inheritance rule shake-up and tax raid coming under the new Labour Party government is likely to hit parents and grandparents who are "baby boomers" worst. Thousands of people are finding themselves targeted as part of an inheritance tax (IHT) raid with more at risk.

The latest tax revenue statistics from HM Revenue and Customs (HMRC) show, for the period from April to September 2024, IHT receipts reached £4.3billion, marking a £0.4billion rise compared to the same period last year.

Laura Hayward, a tax partner at Evelyn Partner, outlined why there has been a "steady" increase in inheritance tax receipts:- She explained: "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."

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She further notes that this trend is likely to continue, particularly affecting the baby boomer generation. "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," Hayward added.

Baby boomers are born between 1945 and 1964 — and they are called this because they were born during the baby boom, the period in which the birth rate shot up in a number of countries. The tax expert noted there are "firm reports claiming business and agricultural property reliefs will be reformed and the gifting rules revamped". Hayward added: "We have spoken to many people this summer who were bringing forward plans to gift substantial assets, not just to start the seven-year clock ticking, but also to pre-empt an expected CGT rise."

She went on and said: "It's not out of the question that the Chancellor could also look at the nil-rate bands, 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."

A UK Government spokesperson said: "We do not comment on speculation around tax changes outside of fiscal events."