HMRC collected a record £2.3bn in inheritance tax between April and June 2026, £96m more than the same quarter last year. The fifth consecutive annual record is the result of the same underlying dynamic: a nil-rate band frozen since 2009, while property values and other assets have kept rising.
HMRC’s quarterly receipts data shows inheritance tax collections of £2.3bn between April and June 2026 — a record for that quarter and £96m above the same period in 2025. For the full 2025–26 tax year, total IHT receipts reached £8.5bn, marking the fifth year in a row in which receipts set a new high. The trend is consistent and accelerating: each new record has been set by a larger margin than the last.
The headline IHT rate has not changed. The nil-rate band — the value below which an estate pays no inheritance tax — has been frozen at £325,000 since 2009. The residence nil-rate band, which can add up to £175,000 where a family home is passed to direct descendants, has also been frozen. These thresholds are set to remain frozen until at least 2030.
Over the same period, property values have risen substantially in most parts of England and Wales. The average UK house price in 2009 was around £155,000; it is now approximately £290,000. Homes that were well below the IHT threshold when purchased have appreciated to the point where the estate they now form part of crosses the threshold — without any deliberate accumulation of wealth and without any change in the tax rules.
Rising investment and pension values have had a similar effect, and the number of estates affected by IHT is projected to double by 2030 as the frozen thresholds interact with decades of asset appreciation across the generation now reaching later life.
From April 2027, unused pension pots will also be brought within the scope of inheritance tax. Currently, defined contribution pension funds that have not been drawn down can be passed outside of an estate for IHT purposes — making them a common element in estate planning for those who have significant pension savings alongside property. From 2027, that exemption ends. The change is expected to affect a significant number of estates where pension funds were being preserved specifically for inheritance, and it will increase the total taxable value of many estates that are already above the nil-rate threshold.
For most UK households, the family home is the largest single asset in the estate. At average property values in England, a homeowner without any other significant assets could already have a taxable estate if they are widowed or unmarried, since the full £500,000 combined threshold (nil-rate band plus residence nil-rate band) only applies where assets are being passed to direct descendants and the property threshold is met.
In practice, property wealth accounts for a substantial share of the taxable assets in most IHT-liable estates. Understanding how a property figures in an estate — its current value, any existing mortgage, and how it interacts with the thresholds — is the starting point for most families trying to understand their IHT position.
There is no single answer to managing an IHT position that works for every family, and the right approach depends on a wide range of personal circumstances. Some homeowners explore whether releasing some property wealth during their lifetime changes the picture for their estate; others look at gifting arrangements, trust structures, or life assurance written in trust to cover a potential tax bill. Each approach has its own implications for the homeowner’s own financial position, their entitlement to means-tested benefits, and the eventual tax outcome.
The most useful starting point for most people is understanding the current position clearly — what is in the estate, what the thresholds are, and what the potential IHT liability looks like at current values — before considering whether any action makes sense. That assessment is something a qualified specialist can help with.
Curious how your property fits into the bigger picture? Read our plain-English guide to equity release and inheritance tax.
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