Inheritance tax receipts rose to £7.7 billion between April 2025 and February 2026, data from HM Revenue & Customs has revealed.
The figure marks a £0.1 billion increase on the same period of the previous year.
With just one month of tax receipts left to be collected in the current financial year, inheritance tax appears set to exceed last year’s record haul of £8.3 billion as frozen thresholds and rising property prices drag more estates into its scope.
Shaun Moore, tax and financial planning expert at Quilter, said of the latest figures: “The surge reflects rising house prices and broader asset inflation, which are pushing more estates above the frozen £325,000 threshold.
“April’s reforms to agricultural and business property reliefs will also begin to shift the system. The Government initially intended to cap 100% relief at £1 million per individual, but after sustained pressure from farmers it lifted the threshold to £2.5 million each, or £5 million for couples, with only the excess qualifying for 50% relief. Even with that concession, the direction is tightening.”
Andrea Jones, national head of Irwin Mitchell’s private client advisory team, said: “Today’s figures show the Government is on track to raise well over £8 billion in inheritance tax this year – £4 billion ahead of where receipt levels stood a decade ago.
“This growth is just the tip of the iceberg. The changes that come into force next month, followed by more far-reaching reforms next year relating to pension funds are considerable and likely to see thousands more families being affected.
“Upcoming changes to inheritance tax, combined with the continued freeze on thresholds means it’s just a matter of time until IHT generates more than £10 billion annually, with receipts in some months tipping over £1 billion.
“Today’s figures are another signal towards the need for estate and trust planning. Often seen as the preserve of the very wealthiest, it is increasingly becoming a practical necessity for a much broader group of people looking to protect family wealth and plan effectively for the future.”
Forecasts from the Office for Budget Responsibility show receipts could more than double to £14.5 billion by the 2030/31 tax year as the freeze on IHT tax-free thresholds continues.
Against this backdrop, industry experts said the latest figures are a timely reminder of how valuable inheritance tax strategies that advisers are developing will be.
Nick Henshaw, inheritance tax expert at Wesleyan Financial Services, said: “We’re already seeing what some have called a ‘dash to drawdown’, with some advisers exploring whether a faster, more structured drawdown approach could help manage clients’ overall tax position.
“In choppy markets, these will put even more emphasis on defending against unintended impact from sequencing risk, volatility drag and pound cost ravaging – all of which could mean a pot is eroded faster than intended, even if running it down is the ultimate aim. Smoothed funds could play a particularly important role here in helping ensure IHT strategies still deliver good outcomes in uncertain conditions.”
Will Hale, CEO of Key Equity Release, believes property wealth will play a growing role in retirement income and intergenerational wealth transfer planning.
Hale said: “With pensions set to fall into IHT calculations next April, the old drawdown sequencing rules are being re-written and ‘which pot do we spend?’ has become one of the most consequential questions families will explore with advisers.
“Estate planning advice is far from straightforward and advisers recognise the need to be fully equipped with insight, tools and support to serve clients that must now look more holistically at their accumulated wealth drawdown options if good outcomes are to be achieved.
“Those over 55 hold £3.7 trillion in property equity and it’s crucial that the home forms part of wealth drawdown and legacy planning advice. Advice must include how products such as modern lifetime mortgages can form part of an efficient intergenerational wealth transfer and retirement funding strategy.”
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