Inheritance tax receipts hit £3.7bn between April and August, up £200m on the same period last year, new HMRC data shows.
The rise is being driven by frozen thresholds and climbing property prices, which are pulling more households into the 40% levy. Estates worth over £325,000 are taxed, and the threshold has been locked at 2020–21 levels until 2029.
Although only 4.6% of deaths in 2022–23 led to an inheritance tax bill, experts warn that figure will rise steadily as more families are caught by the freeze.
The timing comes as Chancellor Rachel Reeves prepares her first Budget on 26 November, with reports suggesting she could replace stamp duty with a national property tax and phase out council tax in favour of a new local homes levy. A charge on homes sold for more than £500,000 is also thought to be under consideration.
Financial planners say the inheritance tax take will only keep growing. Shaun Moore at Quilter said: “Frozen thresholds, high property values, and the inclusion of pensions from 2027 mean inheritance tax is set to increase further.”
Will Hale, chief executive of Key Advice & Air, added: “These figures underline the importance of planning ahead to protect wealth for the next generation. With thresholds unchanged since 2020, families should expect inheritance tax to remain a key target for the Treasury.”