Inheritance tax (IHT) receipts have reached a new high, totalling £3.8bn so far this financial year, according to the latest data from HMRC. This figure surpasses the £3.7bn recorded at the same point last year. Total receipts for the 2025/26 financial year reached £8.5bn.
The increase in IHT revenue is attributed to frozen tax thresholds and rising asset values, including property. The nil-rate band has been held at £325,000 since 2009, while house prices have continued to climb, with average prices in the South East reaching £381,000 last month and London prices at £554,000. The average UK house price increased by 1.4 per cent in August.
Industry experts suggest that rising property values and inflation are causing IHT to affect more ordinary households. Amit Joshi, managing director of wealth at Mattioli Woods, noted that estates that would have previously paid nothing are now liable. Sarah Coles, head of personal finance at AJ Bell, stated that frozen bands are "cutting deeper" due to higher house prices.
Further changes are anticipated from April 2027, when unused pension funds and death benefits will be included in the value of a person's estate for tax purposes. Analysis from Tax Policy Associates indicates that by April 2027, 20 per cent of pensioner households could have enough assets to be exposed to an inheritance tax liability.
While monthly receipts saw a dip from £658m in July to £598m in August, financial planner Lee Quinn of Titan Wealth Planning cautioned against reading too much into a single month's figures, emphasising that the longer-term trend for IHT remains a concern for families.