In April this year, UK inheritance tax (IHT) receipts recorded the second highest monthly total ever.
Figures published by HM Revenue and Customs (HMRC) showed £780 million collected as the new financial year began for 2025/26. If you are inheritance tax planning in Cheshire, it is worth considering that this amounted to a £97 million increase in revenue from the previous tax year.
Forecasts by the Office for Budget Responsibility (OBR) indicate that there is every likelihood the Treasury will raise £9.1 billion in 2025/26, a total increasing to over £14 billion before the decade is out. The OBR predicts that by 2030, almost 10% of estates will be liable to pay death duties, due to a range of factors including increases in house prices, adjustments to IHT rules and allowance freezes.
The issue of IHT is a hot topic at the moment, and wealth managers have been offering advice to asset holders on how they can best mitigate their exposure. People wishing to bequeath estates are being urged to give money away, as gifts from regular income are deemed to be IHT-free from the beginning.
Timing is important, because unlimited giveaways can take up to seven years to be completely free of IHT. Other options include investing in companies that are unlisted and eligible for Business Property Relief or AIM shares, which could be IHT free after 24 months. As of 2026, the IHT on these will be halved to 20%.
Looking forward, with thresholds frozen and asset prices rising, more estates will now need to assess whether they will be affected by inheritance tax and act accordingly.
