Inheritance Tax (IHT) receipts reached £3.1bn between April and July 2025, according to new figures released today by HM Revenue and Customs (HMRC).
This marks a £200m increase compared to the same period last year, reflecting a continued upward trend in revenues generated from estates passing above the tax-free threshold.
The hike of 8% puts the Treasury on course for a fifth consecutive record year of IHT revenues, following £8.2bn collected in 2024/25.
The Office for Budget Responsibility (OBR) forecasts receipts will rise to £9.1bn in 2025/26 and exceed £14bn by 2029/30, driven by frozen nil-rate bands, rising asset prices and changes to reliefs.
Ian Dyall, head of estate planning at wealth management firm Evelyn Partners, said: “The July figure means that Inheritance Tax revenues for this financial year so far are running about 6.9% ahead of the same period last year.
“Monthly receipts data reliably shows how fiscal drag is bringing more wealth into the scope of IHT, but the numbers that really matter for wealthier households are those showing the overall state of the public finances, because that’s what prompted last year’s Budget overhaul of IHT rules, and it’s not unthinkable that the transfer of wealth will be on the table again at the next Budget.
“The dilution of business and agricultural property reliefs doesn’t come into force until next April, and the inclusion of unspent pension assets in estates doesn’t occur until April 2027, so we won’t see how much money they bring in through the Treasury door until well after those dates.
“However, it is well known that families, and especially wealthier ones, tend to take steps to mitigate significant tax increases and to change their behaviour, which raises the risk that the tax take disappoints. It’s doubtless this fear which could put, if the rumour circulated last week is to be believed, the gifting regime under the Chancellor’s spotlight this time around. One of the easiest ways for families to reduce the threat of larger IHT bills is to gift during lifetime, and as the seven-year rule allows unlimited amounts to be transferred and possibly leave the estate altogether, this is the natural escape route that the Treasury might seek to block off.
“One issue with such a step is that gifting might be a plus for other tax revenues and the economy. The forthcoming IHT rule changes are leading people to gift business assets and to start accessing their pensions, to spend as well as give away, which should lead to increased income and other tax revenues in the short term. Funds gifted to younger people are more likely to be spent and fed back into the economy, and in a roundabout way boost VAT and stamp duty land tax for instance. Maybe Treasury officials are not too worried about the short term IHT receipts and more keen to get money moving out of tax-protected pensions?
“But this is still not going to raise the sort of sums that the public purse looks like it needs, certainly not in the short or medium term, so one wonders whether another move on IHT would be worth all the negative headlines.”
