Recent data released today by HM Revenue and Customs (HMRC) reveals that Inheritance Tax (IHT) receipts for the period April to August 2025 reached £3.7 billion. This represents a £0.2 billion increase compared to the same period in 2024 – a rise of 5.7%. The continued growth in IHT revenue highlights the increasing impact of the tax on estates and may prompt further scrutiny of thresholds, exemptions, and potential future reforms.
Industry experts have delved deeper and provided insight.
Shaun Moore, tax and financial planning expert at Quilter comments:
“HMRC’s latest tax receipts arrive just months before the budget and highlight the fiscal bind facing the government. Between April and August 2025, PAYE income tax and National Insurance contributions reached £197.0 billion, up £17.3 billion year-on-year. With thresholds still frozen, more workers are being pulled into higher bands and businesses continue to bear rising employer NICs. These measures have become the backbone of Treasury revenue, but the political reality is that Labour has ruled out increasing income tax, NICs or VAT for working people.
That manifesto pledge leaves Rachel Reeves hemmed into a corner. With a £22bn fiscal hole to fill and the most obvious levers off the table, attention inevitably shifts to other taxes. Inheritance tax is already on the rise, with receipts totalling £3.7 billion so far this year – £0.2 billion higher than the same period in 2024. Frozen thresholds, high property values, and the scheduled inclusion of pensions in 2027 mean IHT is set to grow further, making it a tempting, if controversial, source of additional revenue.
Capital gains tax receipts also reflect this dynamic. Between April and August 2025, CGT brought in £922 million, compared with £852 million over the same period a year earlier. The sharp reduction in the annual exempt amount from £12,300 to £3,000 has pulled far more people into scope, particularly landlords and second-home owners. While receipts in this area are volatile, speculation around further reforms has fuelled debate about whether to accelerate sales. But disposals should only be made if they are part of a long-term plan — reacting to rumour risks crystallising tax liabilities unnecessarily.
The budget is shaping up to be a delicate balancing act between political promises and fiscal necessity. The temptation to tinker with IHT, CGT or property taxes is clear, but reform must be proportionate and predictable, or it risks damaging confidence and distorting behaviour in ways that ultimately reduce the Treasury’s tax take.”
Ian Dyall, head of estate planning at wealth management firm Evelyn Partners, comments:
“The continued rise in inheritance tax receipts is the result of ‘fiscal drag’, with a long-standing freeze on the IHT nil-rate bands spanning a period when asset prices have risen. With the NRBs frozen until 2030, raised property values and investment assets are drawing more families into the IHT net—often without them realising it. This is before the changes to IHT reliefs announced at the 2024 Budget have come into force – changes that are already reshaping estate planning.
Without action on the part of families, the steady increase in estates and assets liable for IHT due to asset growth could turn into a surge once those rule changes go live. The inclusion of defined contribution pension pots in estates from April 2027 has attracted most attention, with its potential impact on any household with pension assets, but the dilution of business and agricultural property reliefs from April 2026 comes first and will significantly expand the scope of taxable wealth – not just in the well-publicised case of farms but much more widely across quite modest family businesses of all sorts.
These changes mean that many traditional estate planning strategies—such as mirror wills or sole ownership of business assets—may no longer be optimal. Families that own businesses need to be proactive: for example, leaving business assets directly to children or into a trust on first death, rather than to a spouse, could preserve valuable allowances. Similarly, drawing down pension pots earlier or using the ‘normal expenditure from income’ exemption for gifting could help mitigate future liabilities.
The rise in receipts is not just a fiscal story, it’s a wake-up call. Many households are sleepwalking into substantial tax bills. But families should also remember that estate planning is not just about tax efficiency, it’s about ensuring that wealth is passed on in a way that meets the family’s objectives and avoids unnecessary financial stress for beneficiaries, while in some cases preserving business continuity.”
Jonathan Halberda, specialist financial adviser at Wesleyan Financial Services, said: “With the Autumn Budget looming, another rise in IHT receipts adds to the pressure on families already bracing for change.
We’re seeing growing panic, with clients eyeing drastic steps like withdrawing pensions early in a bid to stay ahead of possible tax bills. But these knee-jerk moves can backfire, triggering bigger tax bills or long-term financial pain.
Doing nothing is risky. But acting without advice? That could cost even more.
The system is shifting, and more change may be on the way. Now is the moment to get ahead – seek advice, understand your options, and be ready to act when the Chancellor outlines what’s next.
Stephen Lowe, Director at retirement specialist Just Group, said: “Today’s IHT figures prove the two certainties in life – death and taxes. And with rising asset prices, frozen thresholds and last year’s reforms IHT looks set to deliver a bumper tax take for the fifth year in a row.
As the Chancellor continues to feel the fiscal pressure, and having ruled out hikes on major taxes, she will want to explore all her options to raise revenue. Given Inheritance Tax targets those who are wealthiest in society it’s entirely possible that it will once more be in the Chancellor’s sights.
With more estates being subject to Inheritance Tax, and the prospect of further changes to the rules on the horizon, it is important that people keep track of the valuation of their estate, including a recent assessment of their property wealth.
Estate planning is complex and difficult, so many families may find it beneficial to seek professional financial advice to understand their circumstances, the impact of the IHT regime and their options for minimising tax liabilities.”
Nicholas Hyett, Investment Manager at Wealth Club said:
“Inheritance tax continues to be a cash cow for HMRC. While wealth taxes, IHT’s uglier sibling, will be in the spotlight in the run up to the Autumn Budget it wouldn’t be entirely surprising to see further tinkering with IHT too.
As things stand inheritance tax may only affect around 1 in 20 estates, but that number is on the increase as an ever greater number of estates become liable for the most hated of taxes. Years of freezes in thresholds, matched with increasing house prices and rising inflation have pushed more families, who might not consider themselves to be wealthy and would not historically have qualified for the tax, over the threshold.
The current inheritance tax allowance has been frozen at £325,000 for 16 years, and remains frozen until 2030. The £175,000 residence nil rate band hasn’t changed since 2020. These freezes are a stealth tax, which allows the government to increase their take without a backlash from a headline grabbing tax hike, but still contribute to the highest tax burden in 70 years.
In this environment lifetime gifts are probably more attractive than ever, particularly regular gifts out of leftover income since these are immediately free of inheritance tax. This approach is particularly popular with grandparents, who use it to pay for things like school or university fees. Avoiding double taxation from inheritance tax is a nice added sweetener.”
Simon Martin, Head of UK Technical Services at Utmost Wealth Solutions, a leading provider of insurance-based wealth solutions, commented:
On Capital Gains Tax:
“The Capital Gains Tax rate increases and tightening of the annual exemptions announced at the Autumn 2024 Budget is forecast to send collections surging by nearly 50% in this current Financial Year with the Treasury expected to pocket just under £20 billion compared to £13.9 billion last year.
“Behavioural changes around last year’s Budget looked to have driven significant property disposals with the recent annual CGT bulletin uncovering record property disposals in 2024/25. It suggeststaxpayers were looking to sell assets before the new regime was implemented to minimise their tax liability.
“January will see the reporting of CGT incurred on all other asset sales, such as shares and non-residential property, in 2024/25 through self-assessment forms hence the expectation of a bumper tax year in 2025/26.”
On Inheritance Tax statistics:
“Inheritance Tax is delivering repeated record revenues for the Treasury and this financial year is once more on course for yet another all-time high year of tax receipts. This should be no surprise given the frozen thresholds combined with rising asset prices and the new raft of reforms announced at the Autumn 2024 Budget.
The changes announced by the Chancellor last year will see more and more estates breach the Inheritance Tax thresholds and continue to collect bumper receipts. With another tax-raising Budget anticipated to be on the way at the end of November, all eyes will be on whether the Treasury once more revisits the IHT regime.
Against this backdrop, demand for financial planning is rising as families seek clarity on how upcoming rule changes will shape long-term estate and intergenerational wealth strategies.”
Will Hale, CEO of Key Advice & Air comments on today’s IHT data:
“Today’s numbers are a further reminder of the money that is leaking from estates and the importance of good financial planning in order to protect wealth for the next generation.
Whilst part of the reason for the increase in IHT receipts is down to recent rises in asset values, which is a positive for customers, it should be remembered that the Government has consistently chosen to maintain tax free thresholds at their 2020 to 2021 levels. Judging by the ‘kite flying’ that is taking place in advance of the November Budget there must be a high likelihood that not only will these tax thresholds be left untouched but also further measures implemented to boost public finances through increasing the tax take upon death.
Tax planning must not be the preserve of the high net worth. It is imperative that all families seek advice and, given that £3.7 trillion of property wealth sits in the hands of the over 55s, that this advice includes a consideration of all options for reducing the IHT liability – including modern later life lending solutions such as lifetime mortgages.”
