This morning’s HMRC update shows that Inheritance Tax (IHT) receipts totalled £1.48bn through April and May - the first two months of the 2025/26 financial year - drawing many many industry comments around expectations for growing tax receipts.

Stephen Lowe, Director at retirement specialist Just Group, noted that the figure represents an increase of £97m, or 7%, compared to the same period last year, when £1.38bn was collected in April–May 2024/25, kickstarting a fourth consecutive annual record haul of £8.2bn through the 2024/25 financial year.

He added that the OBR’s most recent forecast, published at the Spring Statement, projects another record year coming with IHT predicted to generate £9.1bn for the Treasury in 2025/26 and revenues are expected to raise more than £14bn by 2029/30.

He said: "The Treasury’s IHT revenues continue to surge with this tax train showing absolutely no signs of running out of steam through the first couple of months in this financial year."

"Over the past four years, rising asset prices and frozen thresholds have combined in a pincer movement to drive consecutive record annual totals. The reforms announced at the Autumn Budget 2024, which included further extending the threshold freeze and tightening the exemptions for pension wealth, will likely tip more estates into paying the tax and further boost the Chancellor’s coffers.

"Anyone who is uncertain or concerned that their estate may be subject to Inheritance Tax should get an up-to-date valuation of their estate, including a recent assessment of their property wealth. Estate planning is complex and difficult – especially with tinkering to the rules – and many families who wish to manage their estate efficiently will benefit from professional financial advice."

Rachael Griffin, Tax and Financial Planning Expert at Quilter said: "HMRC’s latest figures for May 2025 mark another chapter in the government’s stealth-tax strategy. Despite no new headline tax rises, receipts continue to climb thanks to frozen thresholds and slashed allowances."

"PAYE income tax and National Insurance receipts for April to May 2025 came in at £84.6bn—£6.1bn higher than the same period last year. With income tax thresholds still frozen, many workers are paying a larger share of their earnings in tax simply due to modest pay rises, even when those increases fail to match inflation.

"This month’s figures also capture the first full month’s impact of the April changes to employer National Insurance contributions. The main rate of employer NICs rose from 13.8% to 15%, and the threshold at which employers begin to pay contributions was lowered from £9,100 to £5,000 per year. These changes are expected to generate an additional £8.6bn annually and represent a clear shift in the burden towards businesses. While the policy may help shore up the public finances, it could also influence hiring decisions and wage growth in the months ahead.

"IHT receipts for April to May 2025 totalled £1.5bn - £98mn more than the same period in 2024. With property values still high and nil-rate bands frozen until 2030, more estates are slipping into the IHT net, often without any deliberate wealth accumulation. Families can be caught off guard, particularly where no planning has been done in advance.

"And with future changes already legislated—including the tightening of business and agricultural reliefs, and the inclusion of unused pensions in estates from 6 April 2027—this upward trend is unlikely to reverse. For those concerned about inheritance tax, lifetime gifting remains a highly effective tool, but it must be carefully weighed against one’s own future financial needs. Utilising trusts can also be a good way of getting money out of your estate while still having a degree of control over how it is spent depending on the type of trust.

"As the country edges closer to the autumn budget, speculation continues about potential tax changes. Reports suggest Labour may look again at capital gains tax, dividend reliefs, and even consider further freezes to income tax thresholds. Combined with rising property and asset values, this could make the overall tax landscape significantly more punitive.

"In this environment, early and careful tax planning is essential. With thresholds still frozen and reliefs under review, the cost of inaction is only going to rise."

Harry Bell, Director of Financial Planning at Charles Stanley, said: "The financial year opened with record IHT receipts and today’s figures show this trend is unlikely to change anytime soon."

"Frozen thresholds are quietly bringing more families into higher tax rates each year, and with changes coming to Business Relief and Agricultural Property Relief in 2026, this will put even more pressure on an increasing proportion of families and businesses. The IFS predicts that by 2029–30 the share of deaths liable for inheritance tax will reach its highest level in over 50 years. Adding even more coal to the fire, pensions will also be included within estates from 2027, generating billions in extra revenue. Historically this tax has made up a small proportion of the total tax haul, but perceptions of IHT being a preserve of the wealthy are set to change.

"IHT is hugely complex, and with rumours of further legislative changes come Autumn, this could make it even more challenging in knowing what to do. In fact, our research found that 48% of consumers have no idea how much IHT will be payable on their estate if they were to pass away. Coupled with various changes still yet to come into effect, it’s crucial that individuals seek professional advice for their estate planning."

Ian Dyall, Head of Estate Planning at wealth management firm Evelyn Partners, said: "May’s Inheritance Tax receipts data came in as expected, continuing the predictable annual rise that has become the norm in recent times. The steady annual rise in IHT receipts has almost become ingrained as inflation drags more assets and more estates across the frozen nil-rate bands."

"IHT receipts are expected to continue rising as the Government moves ahead with its plan to reduce available reliefs by capping Business Relief and Agricultural Property Relief. Unspent assets in Defined Contribution pensions are set to fall within the scope of the death tax in April 2027, a change already creating a planning headache for those looking to pass on wealth to their loved ones.

"One way to mitigate IHT is through lifetime gifting, something clients are increasingly approaching us about in a bid to protect their beneficiaries from tax. Making regular gifts using the ‘normal expenditure out of surplus income’ exemption is one popular option, as is exploring longer-term gifting plan, such as starting the ‘seven-year clock’ ticking on larger gifts.

"How long clients can take advantage of these options remains to be seen. The government may choose to overhaul the gifting regime at some point, potentially extending the seven-year rule to 10 years – a move that would create an extra hurdle for those wanting to pass on wealth in a tax-efficient way."

IHT dip, but...

The data also point to another anomoly that is IHT receipts dipping to around £650m in May, down from £850m in April.

Jonathan Halberda, Specialist Financial Adviser at Wesleyan Financial Services, said: "Even with this month’s dip, the broader trend is clear - frozen thresholds are having a real impact on families and inheritance tax receipts are only likely to rise.

"This is no longer just a tax for the very wealthy, as it was initially designed. More and more families are being drawn into the IHT net – simply as the value of assets, such as their homes, continue to climb. And with pensions set to come into IHT’s scope from 2027, the tax’s reach is going to extend further.

"Taking just a moment to plan around IHT can really pay off. It helps reduces the chances of your loved ones being hit with a surprise tax bill and can help ensure your money is passed on in line with your wishes.

Halberda identifies gits, trusts, planning between partners and utilising wills as ways to deal with the increasing IHT.