The UK's ageing population and growing intergenerational wealth transfers are set to drive a significant increase in inheritance tax (IHT) and capital gains tax (CGT) receipts over the coming decades, according to the Office for Budget Responsibility's (OBR) latest Fiscal Risks and Sustainability Report.
The report, published today (8 July), projected that the proportion of the UK population aged over 80 will rise from 5% in 2025 to 12% by 2075, accelerating the transfer of wealth between generations and boosting tax receipts from estates and capital gains. Under the OBR's baseline scenario, receipts from IHT and CGT are forecast to increase from 1.4% of GDP in 2030-31 to 2.2% by 2075-76. The report stated that this reflects not only demographic change but also a "cohort effect", whereby "the large historical wealth gains of those currently of retirement age" increase IHT liabilities....
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