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UK inheritance tax (IHT) receipts reached £2.3bn for the three-month period ending in June 2026, according to data from HM Revenue and Customs (HMRC). This figure represents a £96m increase compared to the same period in 2025. The rise in tax revenue is largely attributed to the ongoing freeze on inheritance tax thresholds, which remains in place alongside broader freezes on income tax thresholds until 2031.
## Factors Driving Record Inheritance Tax Receipts
The increase in IHT receipts is primarily driven by the “fiscal drag” effect, where frozen tax thresholds fail to account for rising asset values. As property prices and other asset classes appreciate, more estates exceed the current tax-free allowances, pulling families into the inheritance tax net who were not previously liable. According to HMRC, the monthly intake for June 2026 reached £871m, up from £730m in May 2026. Tom Trewby, a director of private client tax at Forvis Mazars, described the current trend as a “tax rise by stealth,” noting that rising asset prices are increasingly impacting families that would have historically remained outside the threshold for inheritance tax.
## Future Policy Changes and Wealth Taxation
The Treasury expects IHT receipts to continue their upward trajectory. This projection is supported by the planned inclusion of unused pension pots within the scope of inheritance tax, scheduled to take effect in April 2027. The political climate surrounding wealth taxation remains a point of focus for investors and tax professionals. While there have been debates regarding the future direction of UK wealth taxes, industry experts warn that significant shifts in policy could impact the UK’s attractiveness for capital. Mark Jephcott, a senior relationship manager at Upmost, suggested that the current environment of rising tax receipts may contribute to the UK being viewed as a “less competitive destination for entrepreneurs, investors and internationally mobile wealthy individuals.”
## Historical Context of Tax Thresholds
The current tax environment is shaped by decisions made in previous budgets, specifically the extension of the income tax threshold freeze to 2031. Historically, these thresholds were adjusted in line with inflation to prevent wage earners from being pushed into higher tax brackets due to cost-of-living pay increases. The decision to maintain these freezes has resulted in a broader segment of the population facing higher tax burdens, a group often referred to as “high earners, not rich yet” (HENRYs). As the government evaluates its economic priorities, the balance between generating tax revenue and maintaining competitive tax structures for high-net-worth individuals remains a central theme in UK fiscal policy.
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