Inheritance tax (IHT) receipts in the UK have reached an all-time high, according to the latest figures released by HM Revenue & Customs (HMRC). Recent data shows HMRC collected £8.2 billion in IHT between April 2024 and March 2025, marking a significant £750 million increase compared to the previous year’s record-breaking total. [Source: HMRC](https://www.gov.uk/government/statistics/hmrc-tax-and-nics-receipts-for-the-uk).
What’s Driving the Increase in IHT Receipts?
The rise in IHT receipts can be partially attributed to a small number of higher-value payments during this period. The data, released on 23 April, highlights a growing trend of estates being subject to higher tax liabilities, as wealth remains one of the focal points of the UK’s tax system.
The upward trend isn’t limited to inheritance tax alone. Income tax, capital gains tax (CGT), and National Insurance Contributions (NICs) receipts for the same period reached £486.9 billion—an increase of £17.6 billion year on year. PAYE income tax and NICs accounted for £423 billion of this total, reflecting a rise of £15 billion compared to the prior year.
Rising Tax Pressures on Estates
For families planning to pass on wealth, rising tax pressures on estates are becoming a growing concern. The challenge is set to intensify, as pensions will be included in IHT calculations for the first time from 2027.
Historically, pensions were often left untouched due to their tax-efficient status within an estate. However, the impending changes mean this strategy may no longer provide the same tax benefits for families. As a result, families are looking for alternative ways to reduce their IHT burden.
Families Turning to Gifting
Evidence suggests families are increasingly turning to gifting as a way to mitigate future IHT liabilities. This has led to a reported surge in six-figure house deposits being gifted by parents to children. While gifting can be a practical strategy, it is not without its challenges.
Under current IHT rules, gifting is allowed but remains subject to the seven-year rule. This rule states that any gift given within seven years of the donor’s death may still be subject to IHT, depending on the value of the gift and the timing of the passing. For families, this creates a layer of unpredictability, particularly for individuals concerned about their health or longevity.
Additionally, gifting large sums is not a viable option for all families, particularly those without children needing a large house deposit or those with limited assets to gift.
Navigating the Complications of IHT
Inheritance tax is notoriously complex, with numerous rules, exemptions, and potential pitfalls. For example, while some strategies may reduce liabilities, they might not be suitable for every family’s circumstances. This is why it’s essential to seek professional advice to help navigate the nuances of IHT planning.
If you’re concerned about the potential impact of IHT on your estate or want tailored guidance on how to reduce your liabilities, consulting a qualified financial adviser is highly recommended. They can help identify the best strategies for your situation, ensuring you achieve the most favorable outcomes while adhering to tax regulations.
Final Thoughts
With inheritance tax receipts continuing to climb, the pressure on families to plan effectively has never been greater. Whether you’re considering gifting, adjusting your financial strategy, or simply seeking clarity on the latest changes, now is the time to act. For further advice and support, don’t hesitate to reach out to a financial adviser who can help you navigate the complexities of inheritance tax planning.
If you have any questions or wish to explore your options, reach out to us. Our team of experts is ready to assist you. please don’t hesitate to contact us on 0333 241 3350 or email info@richmondhousewm.co.uk
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