Inheritance tax receipts have continued their upward trajectory as asset prices rise and major estates are dragged into paying the tax.
Income tax receipts surged dramatically in July, driven by a combination of the self-assessment deadline and the ongoing freeze on tax thresholds.
Inheritance tax receipts for the period from April 2025 to July 2025 reached £3.1 billion, representing an increase of £200 million compared to the same period last year.
“Inheritance tax receipts continue their unrelenting rise, hitting £3.1bn for the year so far. We are only part of the way through the year, but it already looks likely we are in for another record year for this most unpopular of taxes,” said Helen Morrissey, head of retirement analysis, Hargreaves Lansdown.
“The decision to include pensions for inheritance tax purposes has garnered a lot of attention and has put the tax firmly on people’s radar. This means that those who think they may be affected can start putting a strategy in place to try and mitigate it.”
Morrissey suggested there are quick and easy methods to reduce the IHT bill, such as gifting, although this won’t make a dent in the bills that larger estates have to pay.
“There are various gifting allowances such as the £3,000 annual allowance as well as gifting out of surplus income that will prove useful. However, it is hugely important that someone does not gift away too much too early to loved ones and potentially leave themselves short in their haste to avoid this tax,” Morrissey said.