The government’s inheritance tax (IHT) take continued to rise in the first two months of the financial year, while capital gains tax (CGT) receipts also increased, the latest data from HMRC has shown.

IHT revenues totalled £1.5bn in April – May 2025, an increase of £98m compared to the same period in 2024.

The 2024/25 financial year saw record IHT revenues of £8.2bn, while the latest Office for Budget Responsibility (OBR) forecasts estimated that the tax would raise £9.1bn in 2025/26, rising to more than £14bn by the end of the decade.

Estates continue to be dragged into paying the tax as inflation and high property prices bring in more assets across the frozen nil-rate bands.

The continued increase in IHT receipts comes amid rumours that the Treasury is reconsidering its extension of IHT to non-dom’s global assets.

This suggested that the broader impact of these reforms “may still be in flux amid widely reported outflows of wealth from the UK,” said Utmost Wealth Solutions head of UK technical services, Simon Martin.

“The reforms will continue to drive a significant increase in demand for financial planning, as families look to understand how the new regime could affect them and how best to adapt their intergenerational wealth strategies.”

Evelyn Partners head of estate planning, Ian Dyall, added: “The steady annual rise in IHT receipts has almost become ingrained as inflation drags more assets and more estates across the frozen nil-rate bands.

“IHT receipts are expected to continue rising as the government moves ahead with its plan to reduce available reliefs by capping Business Relief and Agricultural Property Relief.

“Unspent assets in defined contribution pensions are set to fall within the scope of the death tax in April 2027, a change already creating a planning headache for those looking to pass on wealth to their loved ones.

“One way to mitigate IHT is through lifetime gifting, something clients are increasingly approaching us about in a bid to protect their beneficiaries from tax. Making regular gifts using the ‘normal expenditure out of surplus income’ exemption is one popular option, as is exploring longer-term gifting plan, such as starting the ‘seven-year clock’ ticking on larger gifts.

“How long clients can take advantage of these options remains to be seen. The government may choose to overhaul the gifting regime at some point, potentially extending the seven-year rule to 10 years – a move that would create an extra hurdle for those wanting to pass on wealth in a tax-efficient way.”

HMRC’s data also revealed that the Treasury collected £423m in CGT in April – May 2025, an increase of £106m compared to the same period in 2024.

CGT receipts for the 2024/25 financial year came in £2.6bn below the OBR’s 2024 Autumn Budget’s forecast of £15.7bn, but are estimated to hit £25.5bn by 2029/30.

“CGT receipts declined last year by more than £1bn, while the OBR had to downgrade its estimated tax take at the Spring Budget primarily caused by declines in the value of financial assets,” Martin stated.

“We also saw wealth outflows and behavioural changes both ahead of and following the revenue-raising 2024 Autumn Budget casting doubt over how successful the reforms will be.

“Nonetheless, asset price inflation and the increases to CGT rates should still mean that receipts return to growth this year and the tax take is predicted to nearly double to over £25bn by the end of the decade.

“Following the recent Spending Review, rumours are likely to swirl that further reforms to the CGT regime could be on the way given the government’s pledge not to increase income tax, VAT or national insurance for workers.”

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