HM Income and Customs (HMRC) has revealed that inheritance tax (IHT) receipts reached £7 billion between April 2024 and January 2025—£700 million greater than throughout the identical interval final yr—placing the federal government on monitor for one more record-breaking yr for IHT income.
With £7.499 billion collected within the 2023–24 tax yr, the most recent figures counsel this whole might be surpassed properly earlier than the tip of the present tax yr in April.
Nicholas Hyett, Funding Supervisor at Wealth Membership, stated the figures replicate a long-term pattern: “Inheritance tax continues to be a meal ticket for HMRC. It may only affect a small percentage of estates, but that number is growing.”
The Workplace for Price range Accountability (OBR) predicts that just about 10% of estates might be answerable for IHT by 2030, pushed by rising property costs, frozen thresholds and the phased removing of sure reliefs.
The principle IHT allowance of £325,000 has been frozen since 2009 and can stay unchanged till a minimum of 2030. The £175,000 residence nil-rate band has additionally been static since its introduction in 2020. These freezes, sometimes called “stealth taxes”, improve authorities revenues with out the political backlash of overt tax rises.
With new inheritance tax guidelines introduced within the Autumn but to return into impact—notably these limiting reliefs for AIM-listed and personal enterprise belongings—consultants warn that efficient property planning is changing into more and more complicated.
“Inheritance tax is becoming harder to avoid, particularly for business owners and investors. Reliefs are shrinking, while asset values are rising,” Hyett added.
Nonetheless, alternatives for tax-efficient planning nonetheless exist. Lifetime gifting—notably common items comprised of surplus revenue—stays a extremely efficient technique. “It’s a popular approach with grandparents helping with school or university fees,” stated Hyett. “Avoiding double taxation through IHT is a nice added sweetener.”
As IHT revenues rise and planning routes slender, households are being urged to hunt early recommendation to guard their estates from mounting tax liabilities.
