Inheritance tax receipts got off to a slightly slower start in the first month of the 2026/27 tax year, but the figures still underline how rapidly the tax burden on estates continues to grow.
HM Revenue & Customs (HMRC) collected £0.7 billion in inheritance tax in April, £65 million less than during the same month last year. However, after a record-breaking £8.5 billion haul in the previous tax year, receipts remain historically high and the government still appears on course for another bumper year of inheritance tax revenues.
The long-term rise in inheritance tax receipts has been fuelled by a combination of frozen thresholds, rising house prices and changes to inheritance tax reliefs, all of which are pulling more estates into the tax net.
While inheritance tax is often viewed as a tax on the super wealthy, HMRC’s own figures show the burden is gradually spreading more widely. The Office for Budget Responsibility estimates that almost 10% of estates could face inheritance tax liabilities by 2030.
At the same time, the very wealthiest estates still account for the lion’s share of receipts. Just 1% of estates accounted for around 65% of all inheritance tax paid, while only 202 estates were responsible for 11% of the total tax take.
Susannah Streeter, chief investment strategist, Wealth Club said:“Inheritance tax has become one of the Treasury’s most effective stealth taxes. Although receipts dipped slightly in April compared with the same month last year, the government’s take from bereaved families remains exceptionally high and is still on course for another record-breaking year.
The government has struggled with inheritance tax reforms with crackdowns on farmers and business owners proving deeply unpopular, while years of frozen allowances mean more ordinary families are quietly being pulled into the inheritance tax net through stealth taxation.
Rising property prices have played a huge role in increasing this stealthy tax take. Many families who would never have considered themselves wealthy now find themselves facing inheritance tax bills simply because the value of the family home has climbed sharply over the years. While the biggest estates still account for the overwhelming majority of inheritance tax paid, the tax base is steadily broadening. The idea that inheritance tax only affects a tiny minority of ultra-wealthy families is becoming increasingly outdated.”
Recent reforms to inheritance tax-efficient assets, including pensions, private company shares and AIM shares, have also created significant uncertainty for investors and business owners. The changes affecting AIM have been particularly unsettling. AIM was designed to help smaller UK companies raise capital by encouraging investors to back higher-risk businesses. Weakening the inheritance tax incentives risks making it harder for those firms to attract long-term investment.
After speculation that inheritance tax relief on AIM shares could be scrapped altogether, the government instead reduced the relief by 50%. While markets welcomed the clarity, renewed suggestions that further changes could still be on the table risk damaging confidence once again.
There is also a danger that the government pushes too far. Inheritance tax is already deeply unpopular, particularly among internationally mobile wealthy individuals. If the UK continues to increase the inheritance tax burden while reducing reliefs, some taxpayers may simply decide to leave the country altogether.
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