The Inheritance tax receipts hit £800m last month, according to fresh data released by HM Revenue and Customs (HMRC).
This is £97m higher than in April of the previous tax year, and continues an upward trend over the last two decades. With such a strong start to the new tax year, predictions that inheritance tax receipts will top the £8.2bn raised in 2024/25 tax year are looking increasingly realistic.
The OBR estimates suggest almost 10% of estates will pay death duties by 2030 due to increasing house prices, changes to inheritance tax rules and years of allowance freezes.
Ian Dyall, head of estate planning at wealth management firm Evelyn Partners, said: “The 2025/26 financial year opens where the previous one left off, with a predictable and substantial annual rise in Inheritance Tax receipts. Estimates last month revealed that IHT receipts for the 2024/25 financial year were 10.8% up on the previous one, and there’s nothing to suggest the current one will be any different.
Nicholas Hyett, investment manager at Wealth Club, commented: “Over the last 20 years the inheritance tax tab has increased from £3.3bn to £8.2bn. With such a strong start to the 2025/26 tax year this is only going one way – and that is up. This is no accident – leaked government documents made it clear this week that inheritance tax is still seen as a cash cow by some members of the cabinet.
“The government’s raids on historically IHT free investments and assets – like pensions, private company shares and AIM shares – create exactly the kind of uncertainty that puts people off making investments. The attack on the AIM market has been particularly egregious where uncertainty is concerned.
“The market is designed to help UK smaller businesses raise money, funding growth and investment. To encourage investors to take on the substantial risks associated with investing directly into individual small companies the government has historically treated them as private companies for inheritance tax purposes – meaning no inheritance tax was due.
“After much speculation that the government would scrap IHT relief on AIM shares altogether, the relief was cut by 50%. This is far from good news for UK companies looking to raise money, but at least dealt with the uncertainty. Money could start flowing into AIM again knowing what the new regime looked like.”
Earlier this week it emerged that the deputy prime minister Angela Rayner has been pushing for IHT relief on AIM to be abolished altogether – even after the 50% relief was announced.
“This is terrible news for AIM,” Hyett continued. “The limited 50% is back in question, investments will dry up as a result and it will be even harder for small UK companies to raise money.”
He added: “The FTSE AIM All Share has fallen more than 8% in the last 5 years. It needs certainty about the future of tax treatment, or it will wither and die. It’s hard to understand how a government that’s supposedly all about growth looks set to casually kill the UK’s growth stock market.”
