Wising up on the latest figures for Inheritance Tax

The tax-take is going up.

Inheritance Tax (IHT) receipts for April 2026 to August 2026 were £3.8 billion, with receipts in June 2026 the highest on record.

The increase stems from a number of factors, including a rise in asset values across the board. Perhaps most significant, however, is the fact that key IHT thresholds have not kept pace with inflation. The tax free threshold, known as the nil rate band (NRB), and other limits are currently frozen until at least 2030/31. By this time, the NRB will have been locked at the 2009 rate for more than 20 years. Over time, this means more estates are pushed into IHT - the trend known as fiscal drag.

It’s worth noting, too, what is not included in these figures. Restrictions to agricultural and business property reliefs from April 2026, which were announced in Autumn Budget 2024, have not yet fed into the system. There is also the extension of IHT to unused pension funds at death, taking effect from April 2027.

Two positives

Only a minority: For many people, the issue of whether their estate is liable for IHT is a question that has never been clarified. With a headline rate of tax on death of 40%, it’s easy to see why IHT can be such a worry. But the first positive is this: IHT still only impacts a minority of estates.

There is normally no IHT to pay if:

• the value of the estate is below the £325,000 NRB
• or you leave everything to a spouse/civil partner; a qualifying registered charity or community amateur sports club.

The tax free threshold can be increased to £500,000 in some circumstances, by use of what is called the residence nil rate band. This applies where the main family home is left to direct descendants, such as children or grandchildren. Restrictions apply where estates (before reliefs) are in excess of £2 million.

Strategies can help: The second positive is that use of available IHT reliefs and exemptions can make a significant difference to outcomes. Gifting money or assets; and use of potentially exempt transfers or trusts, to take value out of an estate, may merit consideration. Advance planning is vital here.



Here to help

As inflation continues to edge up, and thresholds stay level, a periodic review of your affairs can give peace of mind. Whether it’s checking potential exposure to IHT, or suggesting tax efficient ways to structure wealth and assets, our expertise is at your disposal.