Key facts
- Inheritance tax receipts hit a record £2.3 billion in the three months to June 2026.
- This is a £96 million increase from the same period last year.
- In June alone, receipts totalled £871 million.
- Income tax thresholds were frozen until 2031 by former chancellor Rachel Reeves.
- Rising asset prices are drawing more estates into the inheritance tax net.
- Unused pension pots will be included in IHT scope from April 2027.
Inheritance tax (IHT) receipts in the UK have reached a record high of £2.3 billion in the three months leading up to June 2026, marking a £96 million increase from the same period last year. The surge is largely attributed to the freeze on income tax thresholds, extended to 2031 by former chancellor Rachel Reeves, which has drawn more individuals into the tax net despite not necessarily classifying themselves as wealthy.
Rising asset prices are also contributing to more estates being subject to IHT, a trend described as a "tax rise by stealth." The Treasury anticipates these receipts will continue to climb due to increased wealth transfers and the recent appreciation of asset values. Furthermore, the inclusion of unused pension pots within the scope of IHT from April 2027 is expected to lead to further increases in tax bills.
With a new administration entering Downing Street, questions are being raised about how the soaring IHT bills will be managed and the future direction of wealth taxation. Experts warn that significant changes to wealth taxes could alienate higher earners and potentially make the UK less competitive for entrepreneurs and investors. Some proposals include raising the income tax threshold or increasing the top rate of income tax, which could place a heavier tax burden on middle-class Britons and high earners not yet classified as rich.