The government’s inheritance tax (IHT) receipts soared by 10.8 per cent in the 2024/25 financial year to a total of £8.2bn, a new record high, HMRC's latest figures have shown.

This represents an £0.8bn increase compared to the same period (April to March) in 2023/24.

IHT receipts have been steadily increasing, hitting four consecutive years of all-time highs, with the nil-rate band and residence nil-rate band remaining frozen until 2030.

This was compounded by rising property prices, especially in London and the south east, bringing more families into the 40 per cent tax charge on inherited wealth.

“Additional policy changes, including restrictions on Agricultural Property Relief and Business Relief from April 2026, as well as unused pensions falling within the scope of IHT from 2027, will place additional strain on families,” said Quilter tax and financial planning expert, Shaun Moore.

“IHT has long since been a deeply unpopular tax, and its reputation is unlikely to improve any time soon. What was once viewed as a tax on only the wealthiest of families has spread to middle income families, many of which may not even realise they are affected.

“Tax bills are becoming increasingly difficult to mitigate, and this will only worsen as the freeze on the various thresholds continues and as policy changes set in.”

Evelyn Partners head of estate planning, Ian Dyall, added that the ongoing market turmoil and potential recession could hit tax revenues and borrowing costs for the government, and the Treasury could therefore look towards “further areas that can be tapped to shore up the public finances”.

“So the Chancellor might not be done with IHT reform quite yet,” Dyall continued.

“The recent financial market turbulence will, however, have hit the value of some estates in the short term, especially those that are heavily invested in the stock market. One silver lining of this for some families could be an IHT rebate.

“If their estate was valued on death, say, six months ago and the IHT bill settled on the basis of that, then by the time probate is granted and assets have been liquidated, it could be that the total value of the estate has dropped.

“Executors should check the estate’s value at the point it is distributed to beneficiaries and compare this to the estimate given to HMRC when the IHT liability was calculated. It could be that the estate is due some money back from HMRC.”

The government’s latest figures also revealed that its capital gains tax (CGT) take in 2024/25 was £13bn, slightly below the previous year’s CGT receipts of £14.5bn.

“Alongside the heavier income tax burden, the government has hammered CGT in recent years,” commented Moore.

“The Annual Exempt Amount (AEA) once sat at a relatively generous £12,300, but is now just £3,000 and means many more people are having to pay CGT on even relatively small gains.

“More recently, the Chancellor increased the basic rate of CGT from 10 per cent to 18 per cent and the higher rate from 20 per cent to 24 per cent.

“As a result, CGT receipts have continued to climb, but there are some indications that people are thinking twice before realising gains.

“CGT receipts hit £399m in March 2025, bringing the 2024/25 tax year’s total to £13bn. This is slightly lower than last year’s £14.5bn.

“The higher rates and lower AEA could see more investors defer sales as they attempt to mitigate the tax, so we could see a slowdown in CGT receipts despite the harsher measures.”

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