Inheritance tax receipts have risen once more, with HM Revenue & Customs data showing that receipts for April 2025 to March 2026 reached £8.5bn, up £0.2bn on the same period last year. The figures highlight the ongoing impact of frozen thresholds and point to further increases ahead.
Industry experts say the trend is expected to continue, particularly with upcoming reforms such as the inclusion of pensions within estates. Against this backdrop, advisers are reporting a clear rise in demand for estate planning, with a growing focus on holistic strategies, tax-efficient structures and long-term wealth transfer planning as IHT exposure broadens.
Andrew Zanelli, head of technical engagement at Aberdeen Adviser, said:
“Another month, another inheritance tax receipts rise. This comes as no surprise given that the IHT nil rate band has not increased since 2009. With Rachel Reeves extending the nil rate band until 2031, along with introducing IHT on pensions from next April, many more people will pay IHT. As a result, we anticipate the upward trend will only continue with a sharper increase from April 2027.
We’re hearing from advisers that the demand for estate planning advice has risen sharply as people try to understand how the changes will affect them and what steps they can take. Tailored advice that reflects personal circumstances and long-term goals for passing on wealth can be invaluable here. With careful forward planning, IHT exposure can be managed, and we expect trusts to feature more frequently as a tool to pass on wealth. The starting point is understanding your total wealth, followed by careful, well‑structured planning with professional support to help manage risk while staying aligned with wider financial goals.”
Will Hale, CEO of Key Equity Release said:
“Yet another record for IHT receipts serves as a timely reminder for advisers and clients to expand their horizons on retirement income and estate planning strategies and look at all assets and particularly property wealth as part of the mix.
Rising house prices have been a major factor in the increase in IHT receipts along with the ongoing freeze in IHT thresholds which has seen the nil rate band held at its April 2009 level and the resident nil rate band held at its April 2020 level until April 2030.
Recent data published by Savills suggests that the over-60s hold property wealth totalling £3.84 trillion. For many, the home is the largest asset in the personal balance sheet, and it makes no sense for it to be excluded from considerations around funding needs and wants in later life – including efficient intergenerational wealth transfer.
Particularly given the upcoming inclusion of unused defined contribution pension funds in estates from April next year, all advisers should be taking a fresh look at their planning approach – both from an accumulation and decumulation perspective.
Later life lending solutions, including products like modern lifetime mortgages, won’t be appropriate for all customers but they should at least be considered for all over-55s homeowners as part of an holistic plan.
Ian Dyall, Head of Estate Planning at wealth management firm Evelyn Partners, comments:
“Inheritance tax receipts for the 2025/26 financial year are about 2.4 per cent higher than the previous year. No surprises on the rise but as we have seen in recent months it does look like the rate of increase is slowing, and certainly this is less than previous annual rises in the IHT take.
For years, IHT revenues have been boosted quite significantly as frozen nil‑rate bands steadily draw more estates and assets into the tax net as values increase.
The backdrop now, however, is slightly altered: London house prices, which have historically acted as a big engine of IHT exposure, have cooled noticeably over recent years.
Official data yesterday revealed the largest property value decline in inner London since the global financial crisis, with house prices in some of the most expensive London boroughs falling for the fifth month and at double-digit rates in February. Across the South East property prices have pulled back in real terms in the last few years.
That softening is probably slowing the extent to which purely inflation-driven growth has pushed estates over IHT thresholds, particularly for those whose wealth is concentrated in property rather than diversified investments.
Yet receipts are still rising, because with decades of wealth accumulation and many years of frozen allowances, even modest asset growth can inflate IHT bills, regardless of medium‑term property market movements. Meanwhile, an ageing population means more estates, and more estates belonging to the asset-rich boomer generation, are being assessed as time goes by.
Higher interest rates and surging – albeit volatile – markets have also boosted cash balances and investments in recent years, increasing estate values at death even where headline property prices have stalled. At the same time, many families continue to delay or avoid difficult conversations about estate planning, often underestimating the cumulative impact of frozen thresholds.
The key message for families is that IHT remains a long‑term planning issue, not a cyclical one. Falling house prices may ease the pressure at the margins, but without proactive planning, more estates will continue to contribute to rising HMRC receipts.”
Mark Lambert, Head of Onshore Bond Distribution, Chesnara Life (UK) Ltd, said:
“The continuing rise in IHT receipts highlights the growing complexity of estate planning for advisers and the need to access the widest range of solutions possible.
Advisers and clients are already in the countdown to changes coming in from April 2027, when unused pension benefits will start to be included within estates for IHT purposes. Combined with the ongoing freeze to the IHT thresholds until 2031, this means many families are likely to face increased exposure over the coming years.
Many clients will need alternative solutions to pensions, and that is driving a surge in demand for the tax‑effective onshore investment bond wrapper, and associated trusts, which continue to move up the estate‑planning agenda.
Using an onshore investment bond, particularly as a trust investment, can deliver attractive tax‑deferment and tax‑management benefits and offers features such as top‑slicing relief and 5% tax‑deferred withdrawals. In addition, lifetime transfers by way of assignment without consideration are generally treated as not being taxable events for income tax purposes, subject to individual circumstances and prevailing tax rules.”
Commenting on HMRC IHT receipts rising by £200M, Amit Joshi, Managing Director of Wealth at Mattioli Woods, said:
“Inheritance tax revenues continue to climb as frozen thresholds pull more families into the tax net. Rising property values and inflation are quietly turning what was once a tax for the wealthy into a bill for ordinary households. Estates that would have paid nothing a decade ago are now automatically liable, without a single announcement.
What is most concerning isn’t the tax itself, but the lack of awareness. Families often only realise the impact when it’s too late to act. Inheritance Tax has become a planning issue by stealth, and the cost of inaction is measured in lost choices, rushed decisions, and unnecessary tax. Regularly reviewing wills and estate plans, and seeking professional financial advice, is no longer optional. It’s essential to protect family outcomes, preserve control, and ensure hard-earned wealth goes where it was intended, not where it happens to land.”
Sarah Coles, head of personal finance at AJ Bell, Comments:
“The taxman has carved himself a massive slice of your earnings, savings and investments over the past year, devouring a hefty portion of your wealth. With dividend tax rising this month, and key thresholds still frozen for years, it’s worth considering how to keep the taxman from tucking into even more in the years to come.
Alex Ranahan, FSL (tax software specialists) said:
“It is unsurprising that annual Capital Gains Tax receipts rose; what is striking is the scale. The total amount collected in 2024-25 was 62% higher than the previous year, a whole £8.5 billion higher, and was 31% than the next-highest annual CGT receipts collected in 2022-23.
These receipts will be a mixture of a) CGT due on residential property disposals made in 2025-26, and b) other disposals, such as shares or businesses, which were made in 2024-25 when the rates of CGT were increased by the new government.
The problem for the government is that capital taxes are only collected on the disposal of the capital asset. Now that taxpayers have made their disposals and paid the relevant tax, my concern for government finances is that this won’t be repeated, and future years will see a corresponding drop in tax take.
Similarly, changes to inheritance tax might be considered worthwhile for reasons of fairness or achieving policy aims unrelated to increasing government revenues. But you will not see these changes come through in government revenues in any consistent way for some time – we will not be able to understand the full impact these changes have on tax revenues until a few years have passed.
One point in the stats I found interesting was that the penalties collected by HMRC for the month of March 2026 alone were £163 million, the highest single month’s receipts in the last 10 years. Indeed, this would have made up nearly half the total penalties collected in the 2010-11 year.
This seems to have come out with little fanfare from HMRC, but it tells us that the government’s increasing focus on compliance – a Labour pledge at the 2024 election was to hire 5,000 new compliance officers – is repaying the public purse.
Nicholas Nesbitt, Partner at Forvis Mazars, commented:
”No longer a tax reserved for the ultra wealthy, the number of ordinary families affected by IHT will only grow in the coming months. With no adjustments for inflation or asset value growth, frozen thresholds are a tax rise by stealth.
April’s reforms to Business and Agricultural Property Reliefs are already kicking in, and the 2027 inclusion of pensions as part of taxable estates will be a landmark moment. All of these bring a raft of complexities and challenges from a financial planning perspective.
For families, the time for planning is now. We’re seeing clients shifting their planning strategies, increasing retirement spending and accelerating gifting to cut the tax bill. As a result of such activity, many have adapted to these changes and have now settled back into a position of confidence in relation to their exposure to IHT. For those who have not yet taken action, the good news is that there are still many ways to tack.”
Samantha Warner, Legal Director at Winckworth Sherwood, comments:
“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.”
Nick Henshaw, inheritance tax expert at Wesleyan Financial Services, said:
“Rising inheritance tax receipts show the growing pressure on clients – and with pensions coming into scope in 12 months, many are reacting now.
Our research shows nine in ten advisers are seeing increased pension withdrawals, but some of these decisions risk backfiring. Clients are trying to reduce a future IHT bill, while triggering income tax today – and in some cases not improving their overall position.
The challenge is that these moves are often irreversible. Once funds leave a pension, they can’t be replaced, and in volatile markets clients may be locking in losses to solve a problem that’s still some way off.
For advisers, the focus has to be on modelling before action. If a strategy doesn’t improve the overall outcome after tax and risk, it shouldn’t be happening. In volatile conditions, approaches that help manage sequencing risk – such as smoothed funds – can also play a role in avoiding poor timing decisions from becoming permanent damage.
The message is simple: don’t let urgency drive poor decisions. Without proper advice, the rush to reduce IHT could leave clients worse off in retirement.”
Rachael Griffin, tax and financial planning expert at Quilter:
“Today’s figures, rounding off the tax year, show the government is continuing to lean heavily on stealth taxes to support the public finances. While the strength of receipts will offer some short‑term reassurance for the Chancellor, it comes at a time when household finances are under renewed pressure from another period of higher inflation following the start of the war in Iran.”
Jason Hollands, managing director at wealth management firm Evelyn Partners, comments:
‘While this monthly receipts data gives a quick snapshot that will be refined, it suggests that about 62 per cent more was paid to the Treasury in CGT in the 2025/26 financial year than in the previous one. Much of that significant jump in the tax take arrived in the first three months of this year, which include the payment of self-assessment bills for the 2024/25 tax year.
That suggests the surge was driven by investors disposing of assets after April 2024 but ahead of an expected rise in CGT rates that duly arrived at the October 2024 Budget.
Before that Budget, many asset-owners thought CGT rates were going up more than they did, with some Labour MPs arguing for an equalisation with income tax rates, so it seems likely much of this spike in CGT revenues is due to pre-emptive disposals in those middle months of 2024.
Will we be back in the same place this summer and autumn? This week, the Resolution Foundation – a think tank influential with the Government – urged the Chancellor not to “let a good crisis go to waste” and raise taxes further as the war in the Middle East threatens more pressure on the public finances. With the Government’s backbenchers resistant to spending cuts and unrest in Downing Street, another summer of speculation about tax rises looks inevitable, and a further hike in CGT cannot be ruled out.
With taxes on capital gains, investors tend either to bring forward decisions ahead of anticipated changes or to defer crystallising gains afterwards, or both. Many might now wait for a future government to bring the CGT burden back down, while others might be put off by the higher tax environment from setting up or investing in businesses in the first place.
Any distortive effects, and whether CGT revenues remain elevated beyond this recent boost, will only become clear in subsequent years – but history, and evidence from other countries, suggest that higher taxes on investment are rarely helpful in either sense.
As the annual CGT exemption had been slashed by the previous Government to a meagre £3,000 by April 2024, there was – and remains – little protection against CGT for investors selling assets, which will have turbo-charged the revenues from any pre-Budget disposals in the summer of 2024.
Before that, the slashed exemption did nothing to boost the CGT take: final revenue data shows that CGT brought in £16.93 billion in 2022/23, £14.50 billion in 2023/24 and just £13.06 billion in 2024/25, suggesting that many investors were reluctant to sell up with this diminished level of protection.”
Richard Jameson, Partner in the Private Wealth team at top-15 accounting firm Saffery, comments:
“The surge in CGT receipts is what the Chancellor was aiming for when the 2024 Budget rumour mill went into overdrive. So many individuals felt forced into crystallising capital gains at the CGT rate of 20% when rumours abounded about CGT rates rising in line with income tax rates. So, this bumper receipt was a shot in the arm for the public finances – it has brought forward tax receipts to a certain extent – and we’d expect CGT receipts to reduce in the coming years until another rate rise is threatened, which impacts taxpayer behaviour.
IHT receipts rose more modestly, broadly in line with inflation. But watch this space. Recent changes to IHT rules and freezing of the nil rate band at £325,000 mean that IHT receipts are expected to increase hugely in the coming years, despite no change in the 40% rate.”
Susannah Streeter, chief investment strategist, Wealth Club
“The government has arguably made a mess of inheritance tax reform. Crackdowns on farmers and business owners proved unpopular and ultimately unworkable, forcing a partial retreat on relief thresholds. But years of frozen allowances, combined with new rules that will bring pensions into the scope of IHT, mean more ordinary families, not just the wealthy, are being pulled into the tax net. Inheritance tax receipts have hit a fresh high of £8.5 billion, surpassing last year’s total and marking the fifth consecutive annual record.”
Andrew Tully, Technical Services Director at Nucleus said:
“IHT receipts have grown by more than 60% over the last five years, a trend that is predicted by OBR to continue and accelerate. This is due to the freezing of nil rate bands until April 2031, rising UK property values, and planned reductions to agricultural and business reliefs from April 2026.
The Government is also proceeding with its plans to include pensions within IHT from 6 April 2027, and the legislation to introduce this was included in the Finance Act 2026 which received Royal Assent on 18 March. This will drive further strong growth in IHT receipts after 2027.
Taken together all of this is likely to make IHT a more relevant issue for many more families within the next five years. Advisers can help clients mitigate these taxes by setting up trusts and making use of gift allowances and the spousal exemption. It is also likely to lead to many people increasing withdrawals from pensions and either spending, gifting or sheltering those amounts.
Capital Gains Tax receipts have increased massively by more than 60% compared to last year, reflecting higher rates and reduced allowances. The big reduction in the annual exemption has left people with little leeway when selling assets. Advisers can help clients offset losses from other disposals, transfer assets to a spouse or civil partner to use their allowance, stagger sales across tax years, and use ISA and pension wrappers.”
