Inheritance tax (IHT) receipts reached £4.7 billion between April and September, up £300 million on the same period last year, as rising asset values and frozen thresholds increased the number of estates liable for the levy.
The latest figures released by HMRC have triggered warnings from estate planners and wealth managers that IHT is “becoming a planning issue by stealth”.
Managing director of wealth at Mattioli Woods, Amit Joshi warned that families often discover their exposure only when it is “too late to act”, making regular reviews of wills and estate plans increasingly important.
The IHT receipts September figure compares with £671m in the same month last year and exceeds the previous monthly record of £871m set in June 2026.
Samantha Warner, legal director at Winckworth Sherwood, predicted IHT revenues are set to rise further from April 2027 when most unused pension funds become subject to tax: “The nil-rate band (NRB) and the residence nil-rate band (RNRB) have not been adjusted for inflation or rising property values, and when pensions are added into the mix even more estates will become liable for IHT,” she explained, adding “It remains a persistent and unavoidable inheritance tax planning issue, and one that should not be ignored.”
Referring to the changes to pension funds and death benefits set to come into play next April, Rachael Griffin, tax and financial planner at Quilter expressed hope that the government will reconsider gifting rules.
“Increasing the gifting allowances would give people greater scope to pass money down during their lifetime as more wealth is potentially dragged into the inheritance tax net,” Griffin said.
“That may be wishful thinking, but the existing gifting allowances look increasingly out of step with the scale of the changes coming down the track.”
Responding to the latest HMRC figures, Will Hale, CEO of Key Equity Release said a “holistic approach” should be taken when giving advice on estate planning in the current climate: “IFAs and wealth managers who are not qualified in or do not want to advise on products such as modern lifetime mortgages need to set up referral partnerships with specialist advisers who can help ensure good outcomes for their clients.
“Later life lending is no longer a last resort and products such as lifetime and retirement interest only mortgages can be used to address a range of financial and lifestyle objectives for a diverse profile of over-55s homeowners.
“Whether the drivers are tax-efficient intergenerational wealth transfer strategies or more basic retirement funding requirements, the home needs to be brought into the plan.”
Ian Dyall, head of estate planning at Evelyn Partners added despite moderation in property prices, the trajectory of exposure to IHT for many “remains firmly upwards”.
“The IHT landscape is becoming more challenging” added Dyall. “The reforms to agricultural and business property reliefs are now taking effect, and from April 2027, unspent pension assets will generally form part of the estate for IHT purposes.
“That will draw many more families into the tax net and increase liabilities for others who already expected to pay, especially if no action is taken by the estate to plan.”
He added: “For many households, the key lesson is that estate planning is no longer something that only concerns the very wealthy.
“Checking wills and death benefit nominations, making use of available gifting exemptions, considering the role of trusts and insurance, and ensuring assets are structured efficiently can all help reduce an unnecessary tax burden on future generations.
“The earlier those conversations take place, the greater the planning opportunities tend to be.”
