Inheritance Tax hits 6-month high and Capital Gains Tax rises as Budget looms

October 21, 2025

The latest HMRC update published this morning shows that the Chancellor collected £1,129 million in Capital Gains Tax (CGT) through the first six months of 2025/26, a rise of 8% or £83 million in comparison with the same period in the previous financial year (£1,046 million). CGT receipts are estimated to hit £25.5 billion a year by 2029/30 – nearly twice current levels.

This morning’s data also shows that Inheritance Tax (IHT) receipts recorded a total of £4.4 billion through the first six months of 2025/26, an increase of £125 million (3%) compared to the same period in 2024/25 (£4.3 billion).

Simon Martin, Head of UK Technical Services at Utmost Wealth Solutions, a leading provider of insurance-based wealth solutions, commented:

On Inheritance Tax statistics:

“Inheritance Tax continues to deliver ever increasing sums for the Treasury building on the reforms announced at the Autumn 2024 Budget. Combined with frozen thresholds, it is clear that more estates will tip into paying IHT in the years ahead, building higher Inheritance Tax revenues.

“As we approach another revenue-raising Budget it looks likely that the Chancellor will continue to simplify and tighten the IHT regime. A change to the seven-year gifting period – either by extending the period or reducing the period but abolishing IHT taper relief – appears to be a likely target, echoing ideas previously floated by the Office for Tax Simplification.”

On Capital Gains Tax:

“The Treasury is benefitting from the increase in Capital Gains Tax rates and the tightening of the annual exemptions at the Autumn Budget which are expected to increase receipts by nearly 50% in this 2025/26 tax year and reach around £20 billion.

“There have been rumours that Capital Gains Tax could be revisited by the Chancellor in her Autumn 2025 Budget, for example by ratcheting up rates again or removing the exemption for primary residences on the sale of all homes of over a set threshold. Any further changes to Capital Gains Tax could materially impact behaviours around investment, the property market and the timing of asset disposals.”