Inheritance tax (IHT) receipts reached £5.8 billion in the first eight months of the 2025/26 tax year, according to data released by HM Revenue & Customs (HMRC) this morning.
That figure is £84 million higher than the same period last year and continues a steady upward trend that has been in place for more than two decades.
Earlier this year the Office for Budget Responsibility forecast that IHT would raise £9.1 billion this current 2025/26 tax year. The figures announced today coupled with the changes announced in last month’s Budget suggest that we are well on the way to meet these figures with four more months to go.
Experts share their analysis and opinions below:
Isaac Stell, Investment Manager at Wealth Club, said:
“The Budget confirmed that inheritance tax is already one of the government’s most dependable revenue raisers. At the start of this Parliament IHT brought in £8.3 billion a year and by 2030/31 that figure is forecast to rise to £14.5 billion – an extraordinary increase driven largely by frozen thresholds and a stealthy approach to raising revenues without major announcements that cause a stir. This confirms that the inheritance tax rules in place are already doing their job as one of the Treasury’s quietest – and most reliable – revenue raisers.
The Nil Rate Band and Residence Nil Rate Band – £325,000 and £175,000 respectively – were already frozen until April 2030. The Budget extended that freeze by a further year, meaning they will now remain unchanged until April 2031. Had these thresholds risen with inflation, far fewer estates would be paying any inheritance tax at all.
The same approach has been applied to reliefs. The new £1 million allowance for 100% Business Property Relief and Agricultural Property Relief, due to take effect from next April (2026), will also be frozen until April 2031. While this still represents a significant restriction compared to the previous system, there was at least one welcome reversal. The government has confirmed that this £1 million allowance will now be transferable between spouses and civil partners. That change removes the pressure many families felt to ‘use up’ the allowance on first death and brings BPR and APR more into line with other inheritance tax allowances.
Pensions have also been caught in the inheritance tax net. From 6 April 2027, unspent pension pots will be brought within the scope of inheritance tax, removing their long-standing role as a planning tool.
Taken together, these measures show a government that is still squeezing more revenue out of inheritance tax, but is running out of subtle ways to do it. Freezes, restrictions and quiet extensions in the form of Fiscal Drag can only go so far. There is only so much more that can be raised through this way. That reality applies well beyond IHT. At some point, if the government wants more money, it will have to be honest with voters and raise taxes openly and in doing so run the risk of losing votes in the next election.”
Shaun Moore, tax and financial planning expert at Quilter:
“HMRC’s latest tax receipts highlight a tax system that is increasingly being shaped by design choices rather than short-term fixes. With the budget now behind us, it is clear that frozen thresholds are no longer a temporary measure but a central part of how revenues are being raised. These figures will certainly bring some Christmas cheer to the Treasury even if it represents a nation paying ever more tax.
PAYE Income Tax and National Insurance receipts for April to November totalled £309.6bn, an increase of £32bn on the same period last year. This reflects the ongoing interaction between nominal pay growth and static thresholds, which continues to pull more people into higher tax bands even where real incomes remain under pressure.
While headline tax rates have been left unchanged, the share of income being taxed continues to rise. In the run-up to the Budget there was speculation that income tax rates might increase or thresholds could be lowered outright. Neither happened. Instead, the decision to extend the threshold freeze delivers a similar outcome over time, but in a way that is less visible and easier to sustain politically.
Rather than relying on eye-catching tax rises, the Chancellor has opted for a series of incremental decisions layered onto a system that steadily increases the tax take by default. For working households, this means higher marginal rates are increasingly encountered earlier, even without a single moment that feels like a clear tax rise.”
Nick Henshaw, Head of Intermediary Distribution at Wesleyan Financial Services, said:
“Another rise in IHT receipts will heighten client concern about being exposed to the tax.
“The Autumn Budget may not have brought any new surprises, but there’s still the big change coming in April 2027, when pension benefits are brought into scope. And we’re entering a natural point in the year for reflection, where clients start thinking about what more they could or should be doing to protect their wealth and pass it on to their loved ones.
“As advisers have these conversations, it’s important they consider specialist tools they might need to help deliver effective strategies – such as using on-platform smoothed funds to address sequencing risk and volatility drag to ensure pension assets last the desired time, even if clients are accelerating drawdown deliberately as part of their IHT plans.”
Stephen Lowe, director at retirement specialist Just Group, commented:
“Inheritance Tax continues to be a quiet but powerful revenue engine for the Treasury, with another bumper year of receipts on the cards as rising asset prices, frozen thresholds and tighter exemptions do the heavy lifting.
“With record-breaking takings rolling in and last year’s Budget reforms still feeding through, Inheritance Tax is securing its spot as one of the Treasury’s most dependable money-spinners.
“In a changeable fiscal environment, it is important that anyone who is uncertain or concerned that their estate may be subject to IHT gets ahead of the game. An up-to-date valuation of their estate, especially an assessment of their property wealth, will be crucial to future planning.
“Estate planning is complex and it’s not made any easier when the rules are shifting. Many families who wish to manage their affairs efficiently will benefit from professional financial advice.”
Samantha Warner, Legal Director at Winckworth Sherwood, said:
“IHT revenues continue to steadily rise due to the prolonged freeze on IHT thresholds. The nil-rate band (NRB) and the residence nil-rate band (RNRB) have not been adjusted for inflation or rising property values, which means more estates are becoming liable for the tax as asset values increase. It remains a persistent and unavoidable inheritance tax planning issue, and one that should not be ignored. To avoid unexpected financial burdens, it is crucial for individuals to regularly review their wills and estate planning, with professional legal advice, to manage their wealth efficiently.”
Simon Martin, Head of UK Technical Services at Utmost Wealth Solutions, a leading provider of insurance-based wealth solutions, commented:
On Inheritance Tax statistics:
“With two-thirds of the tax year gone, Inheritance Tax receipts are on track for yet another record year, driven by sustained growth in property and wider asset valuations.
“By extending the freeze on Inheritance Tax nil-rate bands and allowances at the Autumn Budget 2025, more estates are likely to fall within the scope of IHT over the coming years. Combined with the significant structural reforms announced at the Autumn Budget 2024, Inheritance Tax looks set to remain an increasingly important and reliable source of revenue for the Treasury for the foreseeable future.
“That said, it was welcome to see relatively limited further tinkering with the regime in the recent Budget. Stability of tax legislation gives families and advisers greater certainty, allowing them to plan more effectively in what is already a complex and long-term area of financial planning.”
On Capital Gains Tax:
“The Treasury continues to benefit from its reforms to the Capital Gains Tax regime with increased rates announced at the Autumn Budget 2024 expected to drive growing collections.
“These receipts are now forecast to be higher than previously expected thanks to both reduced reliefs on employee ownership trusts confirmed at the Autumn Budget 2025 and ongoing growth in equity and property valuations. Nonetheless, behavioural changes and theso called ‘Mansion Tax’ reforms could yet act as a drag on rising CGT receipts.
“Given the rapid and consequential changes to the Capital Gains Tax regime, we are seeing strong demand for financial planning as people look to both understand how the changes could impact their long-term strategies and to prepare for the future.”
Commenting on today’s IHT data, Will Hale, CEO of Key Advice & Air, said:
“These latest figures, alongside the confirmation in last month’s Budget that the Inheritance Tax nil rate band will remain frozen at its current level of £325,000 until April 2031, mean that the record-breaking £9bn+ in IHTreceipts expected in 2025/26 will continue to grow in the years ahead.
“Furthermore, with pensions being brought into the scope of IHT from April 2027, it is clear that efficient transfer of wealth through the generations is becoming ever-more complex. This should be viewed as a great opportunity for advisers to demonstrate the value they deliver but planning strategies need to be reviewed in light of the changes to the tax environment.
“With over £3.7 trillion in property equity in the hands of the over 55s, it is crucial that the home forms part of the plan and that advice considers how products such as modern lifetime mortgages can form part of efficient intergenerational wealth planning.”
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