The value of stamp duty land tax collected from homebuyers in February amounted to £1.1bn, a £203m rise from the month before, a mutual’s analysis found.
Looking at the latest data from HMRC, Coventry Building Society said this increase was likely because people were rushing to beat upcoming tax changes.
This was higher than the intake of £781 in February last year.
Since April 2024, the start of the financial year, the stamp duty intake has totalled £12.5bn, up from £10.7bn the preceding year.
Since the threshold was increased from £125,000 to £250,000 and the first-time buyer relief was raised from £300,000 to £425,000 in September 2022, the Treasury has collected more than £32.3bn in stamp duty.
This will return to the previous levels on 1 April.
Going digital
Sponsored by Halifax Intermediaries
Jonathan Stinton, head of intermediary relationships at Coventry Building Society, said: “Buying a home is about to get a lot more expensive. Those in the middle of the buying process will be racing against time to beat the deadline. Those who can’t get the keys to their new house in the next 10 days need to brace themselves for a hit, potentially amounting to thousands of pounds.
“The pressure of the deadline will be felt by buyers across the market, with some having to make tough financial decisions in the weeks ahead. But the impact won’t stop on 1 April – the higher costs of stamp duty are likely to affect buyer behaviour for months to come. With buyers needing to factor in extra tax, we expect to see a shift in demand, slower sales, and a knock-on effect on house prices.”
IHT raises £7bn
Inheritance tax receipts hit £7bn in the 10 months from April 2024 to January 2025, according to figures from HMRC.
This is £700m higher than the same 10 months last year and continues the upward trajectory over the past two decades.
The main inheritance tax allowance has now been frozen at £325,000 for 15 years, and remains frozen for another five years until 2030, while the £175,000 residence nil-rate band hasn’t changed since 2020.
Experts say these freezes are a form of “stealth tax”, which allows the government to increase tax-take without a backlash from a headline-grabbing tax hike.
Further policy changes are likely to exacerbate the issues. Restrictions on Agricultural Property Relief and Business Relief from April 2026 could place additional strain on family-owned farms and businesses, while from April 2027, unused pensions will also fall within the scope of inheritance tax.
Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, said: “IHT might not be the most widespread of taxes, but those caught in its web feel the pinch, especially if it’s a bill they weren’t expecting. High house price growth has been a key factor in dragging families into the net, as are frozen tax thresholds, which will remain in place until at least 2030.
“The recent announcement that pensions will become liable for inheritance tax will also bring more people into the mix from 2027. However, there are things that can be done to lessen the impact. We expect people will make more use of the gifting allowances available to give to their families while they are still alive. Among the array of allowances available is the £3,000 annual exemption – a limit that has been frozen for decades, as well as the ability to give away as many small gifts of up to £250 to as many people as you wish.
“For those with larger potential liabilities, the ‘gifting out of surplus income’ rules will come in handy. However, they will need to make careful records to demonstrate the gifts are regular and that making them does not disrupt their standard of living.”
Shaun Moore, tax and financial planning expert at Quilter, said: “Despite repeated calls for reform, the government continues to rely on IHT as a growing source of revenue. Without intervention, the number of families caught in the IHT trap will continue to rise, forcing many to rethink their estate planning strategies.”
Some of this article was first published on Mortgage Solutions‘ sister site, YourMoney.com. Read: Inheritance tax raises £7bn in 10 months
