IHT receipts hit record £3.3bn figure   – Mortgage Strategy

HMRC’s latest figures show that inheritance tax receipts jumped by £0.1bn to £3.2bn between April and July 2026 – the highest figure on record.

Higher receipts in future years are forecasted due to higher volumes of wealth transfers and an increase in asset values.

The government’s decisions to maintain the tax-free thresholds at their 2020 to 2021 levels up to and including 2030 to 2031, is also expected to impact IHT levels.

Commenting on the latest numbers Evelyn Partners head of estate planning Ian Dyall said the growth of inheritance tax receipts had slowed in recent months, probably as a result of moderating property values in London and the South East over the last few years, which would have reduced the value of some estates.

“But no one should let this lull them into complacency over the potential reach of IHT. We have not yet seen the effects of the restrictions to agricultural property and business reliefs that came in this April.

“And the scope of IHT will increase dramatically from next April, when unspent pension assets become part of savers’ estates, not least as bullish equity markets have boosted pension pots in recent years. That will mean more families will become subject to IHT and estates that are already facing an IHT bill could be looking at an even greater one.”

Dyall stressed that the beneficiaries of those older than 75 were at risk of a super-sized tax burden from next April as they could also pay income tax at their marginal rate when they withdraw funds from the pension, after it’s already been depleted by IHT. That could mean they end up with not much more than a third of the value of the pension left by the saver.

He added: “Moreover, an ageing population will drive a rise in IHT liabilities in the coming years, as the wealthy boomer generation enters late life, with the OBR recently forecasting that receipts will rise to 1.4% of GDP by 2030/1.

“That is of course unless people take some action to mitigate an unnecessary tax burden on the estate at death. That could take the form of lifetime gifting or even just spending it on themselves – and possibly leaving other assets for loved ones, such as property.”