Inheritance tax (IHT) receipts have jumped again as the total take from the tax continues to climb steeply.
Between April 2024 and March 2025 HMRC collected £8.2bn, which is £800m more than the same period last year. It represents an increase of 10.8% on the same period between 2023 to 2024.
The rapid climb in the amount raked in is due to a combination of the threshold for paying IHT being frozen by the government and the value of estates increasing.
The amount taken is set to continue climbing unless the thresholds are raised. The speed at which it rises could be further accelerated as pension posts are scheduled to be drawn in from April 2027.
Ian Dyall, head of estate planning at Evelyn Partners, said: “The inheritance tax take for the Treasury has notched up another record financial year. That’s a trend that is unlikely to change as long as nil-rate bands remain frozen, which is currently until at least 2030.
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“Even with market turbulence like we have seen recently, long-term increases in asset values tend to draw more estates across the IHT thresholds, and the inclusion of unspent pension funds in IHT liabilities from April 2027 – along with the dilution of agricultural and business reliefs next year – will give that trend a big leg up.
“Extended financial market turmoil and a possible recession could hit tax revenues and borrowing costs for the Government, in which case Treasury minds will wander towards further areas that can be tapped to shore up the public finances,” Dyall continued. “So the Chancellor might not be done with IHT reform quite yet.
“The recent financial market turbulence will, however, have hit the value of some estates in the short term, especially those that are heavily invested in the stock market. One silver lining of this for some families could be an IHT rebate.”
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Tim Snaith, partner at Winckworth Sherwood, added: “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.”
