HMRC took £3.2 billion in inheritance tax (IHT) in the three months to July 2026, the latest government figures show.
IHT receipts over the three month period were around £100 million higher than the same period in 2025.
The rise comes with the IHT nil-rate band frozen at £325,000 since 2009 and until 2031 and with assets, including houses and investments, rising in value. The average UK house price increased by 2% between June 2025 and June 2026, based on the latest Land Registry data.
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Unused pensions will also be included within people’s estates from April 2027. The government estimates this will drag a further 10,500 estates that previously would have had no IHT liability into paying the tax in 2027/28.
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Simon Martin, head of UK technical services at life insurance and pension provider Utmost, said: “Inheritance tax revenues remain well above historical levels, reflecting the continued impact of frozen thresholds alongside rising asset values, which are bringing more families within scope of the tax.”
How is inheritance tax changing?
Pensions will be part of an estate for IHT calculations from April 2027, while business relief and agricultural relief now face new restrictions.
Agricultural and business property reliefs for IHT have been capped at £2.5 billion since April 2026, following a government climbdown which would have seen the threshold at a lower £1 million. There is also the ability to transfer this threshold on first death to a surviving spouse or civil partner.
With Andy Burnham as prime minister, there could be further changes announced to the IHT regime.
Shaun Moore, tax and financial planning expert at wealth manager Quilter, said: “With the Budget drawing near, wealth taxes are likely to attract increasing attention as the government looks at how best to balance the books. However, any significant changes would need to be carefully balanced against the government's wider economic priorities.”
How to cut your inheritance tax bill
You can only plan based on the current tax system and some allowances remain.
Assets can be inherited by a spouse tax-free and leaving money to charity can also reduce your IHT liability.
You also receive a £3,000 annual allowance each year, meaning gifts up to this value are not liable for IHT.
Gifts over this size can fall outside the scope of IHT if made seven years or more before your death, with IHT owed on gifts made within seven years assessed using a sliding scale.
You can also make regular gifts of any size IHT-free if made out of “surplus income” – money transferred to someone not from savings or investments.
