HM Revenue and Customs (HMRC) has revealed that inheritance tax (IHT) receipts reached £7 billion between April 2024 and January 2025—£700 million more than during the same period last year—putting the government on track for another record-breaking year for IHT revenue.
With £7.499 billion collected in the 2023–24 tax year, the latest figures suggest this total will be surpassed well before the end of the current tax year in April.
Nicholas Hyett, Investment Manager at Wealth Club, said the figures reflect a long-term trend: “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 Office for Budget Responsibility (OBR) predicts that nearly 10% of estates will be liable for IHT by 2030, driven by rising property prices, frozen thresholds and the phased removal of certain reliefs.
The main IHT allowance of £325,000 has been frozen since 2009 and will remain unchanged until at least 2030. The £175,000 residence nil-rate band has also been static since its introduction in 2020. These freezes, often referred to as “stealth taxes”, increase government revenues without the political backlash of overt tax rises.
With new inheritance tax rules announced in the Autumn yet to come into effect—particularly those restricting reliefs for AIM-listed and private business assets—experts warn that effective estate planning is becoming increasingly complex.
“Inheritance tax is becoming harder to avoid, particularly for business owners and investors. Reliefs are shrinking, while asset values are rising,” Hyett added.
However, opportunities for tax-efficient planning still exist. Lifetime gifting—particularly regular gifts made from surplus income—remains a highly effective strategy. “It’s a popular approach with grandparents helping with school or university fees,” said Hyett. “Avoiding double taxation through IHT is a nice added sweetener.”
As IHT revenues rise and planning routes narrow, families are being urged to seek early advice to protect their estates from mounting tax liabilities.
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Inheritance tax receipts surge to £7 billion in just ten months, says HMRC