Inheritance tax receipts for April and May 2025 reached £1.5 billion, a £98 million rise on the same period last year.
Figures from HM Revenue & Customs show that the freeze of both the Nil Rate Band and the Residence Nil Rate Band until 2030 continues to see more families face IHT bills.
According to the Office for Budget Responsibility’s latest forecast, inheritance tax will raise £9.1 billion in the 2025/26 tax year.
Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, said of the latest figures: “These strong figures were put down to a small number of larger transactions than usual back in April, but as the months progress, we will continue to see more families dragged into the net, as frozen thresholds means fiscal drag remains a huge factor.”
Experts said that inheritance tax is no longer just for the very wealthy, with rising property prices, frozen thresholds and the decision to include pensions in the IHT scope from 2027 leading to more families being affected.
Morrissey said: “It’s a move that will drag many more people into the net and is making them rethink their plans. Those able to access their pensions may decide to gift some of it away to loved ones now rather than wait to leave it to them in their will.
“Large gifts leave your estate for inheritance tax purposes after seven years so there will be people who want to get that clock ticking sooner rather than later. Others will want to make use of the various gifting allowances that enable you to give money away and it leaves your estate straight away.”
Rachael Griffin, tax and financial planning expert at Quilter, shared a similar sentiment:
“With property values still high and nil-rate bands frozen until 2030, more estates are slipping into the IHT net, often without any deliberate wealth accumulation. Families can be caught off guard, particularly where no planning has been done in advance.
“And with future changes already legislated, including the tightening of business and agricultural reliefs, and the inclusion of unused pensions in estates from 6 April 2027, this upward trend is unlikely to reverse. For those concerned about inheritance tax, lifetime gifting remains a highly effective tool, but it must be carefully weighed against one’s own future financial needs. Utilising trusts can also be a good way of getting money out of your estate while still having a degree of control over how it is spent depending on the type of trust.”
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