Editor's note: This brief was summarised by The Property AI Newsroom from a report by Mortgage Strategy. Read the original article for full details.
Inheritance Tax Receipts Hit Record High, Future Rises Expected
HM Revenue & Customs (HMRC) has reported that inheritance tax (IHT) receipts reached a record £3.2 billion between April and July 2026. This figure represents a £0.1 billion increase and is the highest on record for this period.
According to the report, higher IHT receipts are forecasted in future years. This is attributed to increased volumes of wealth transfers and rising asset values. The government’s decision to maintain tax-free thresholds at their 2020 to 2021 levels until at least 2030 to 2031 is also expected to impact IHT levels.
The report notes that the growth of IHT receipts has slowed in recent months, which has been linked to moderating property values in London and the South East over the last few years. This moderation may have reduced the value of some estates.
From April, restrictions to agricultural property and business reliefs have come into effect, but the report states that the full impact of these changes has not yet been seen. Additionally, from next April, unspent pension assets will become part of savers’ estates, which is expected to increase the scope of IHT. The report highlights that this change, combined with strong equity markets, could result in more families becoming subject to IHT and higher bills for estates already facing the tax.
The report also mentions that beneficiaries of those over 75 could face a higher tax burden from next April, as they may pay income tax at their marginal rate when withdrawing funds from pensions that have already been subject to IHT.
An ageing population is expected to drive a further rise in IHT liabilities in the coming years, with the Office for Budget Responsibility forecasting that receipts could rise to 1.4% of GDP by 2030/31.
For letting agents and inventory clerks, these developments may be relevant when advising clients on property assets and estate planning, as changes in IHT rules and thresholds could affect property transfers and inheritance outcomes.
Source: Mortgage Strategy