Inheritance Tax Windfall: Government Set to Rake in Over £9bn

Inheritance Tax (IHT) receipts are on course to exceed £9bn by the end of the current tax year - predicts Irwin Mitchell following the release today of the latest statistics from HMRC.

Specialists at Irwin Mitchell Private Client Advisory say the figures point to hundreds more estates being taxed and that the £10bn milestone looks to be within easy reach for 2026/27.

The latest figures show that IHT tax receipts in July 2025 stood at £844m – the highest monthly figure recorded.

This takes the tax generated from IHT this year to £3.1bn - a rise of 8% compared to the same period 12 months ago.

Expert Opinion

“Today’s figure of £844m for IHT receipts is the highest monthly amount recorded. It now looks likely that inheritance tax receipts will exceed £9bn by the end of March 2026 and following the significant changes due to be introduced in 2026/27, I wouldn’t be surprised if the number is closer to £10bn 12 months later.”
Andrea Jones, partner and head of Irwin Mitchell’s Private Client Advisory team.

Further changes may come in the Autumn Budget, including a proposed £100,000 lifetime gifting cap. Currently, gifts made more than seven years before death are exempt from IHT. However, proposals under consideration could cap lifetime gifts at £100,000, with any excess taxed at 40%.

This latest prediction follows Irwin Mitchell’s latest thought leadership publication, the Inheritance Tax Revolution Report, which explores the evolving IHT landscape across the UK. The report draws on seven years of data across 121 postcode areas and forecasts that the number of estates liable for IHT will rise from 4% to 7% by 2028, with Greater London’s total IHT bill expected to grow by 54% to £2.6 billion annually.

Irwin Mitchell also revealed recently London’s elite neighborhoods dominate the top 10 list for the highest average IHT paid per estate. According to the latest statistics, Kensington leads with each estate paying an average of £1.3m in IHT. Chelsea & Fulham, and Cities of London & Westminster also feature prominently, each with average IHT bills over £1m.