Inheritance tax (IHT) receipts leapt to £4.1bn between April and October, according to figures released by HMRC today.

This was a £500m rise year-on-year.

Receipts for October were £580m, a rise from £466m in the same month last year.

The average IHT bill is currently £216,000, with this set to rise to £297,793 by 2025-26 and £336,605 by 2027-28, according to research by Wealth Club.

Chancellor Jeremy Hunt announced an extension in his Autumn Statement to the freeze on Inheritance Tax thresholds to April 2028 last week. 

Prime Minister Rishi Sunak had previously frozen the threshold at £325,000 until April 2026 during his tenure as Chancellor.

The Office for Budget Responsibility now expects IHT receipts to soar from £6.1bn in the 2021/22 tax year to £7.8bn in 2027/28 - an increase of 28%.

Julia Rosenbloom, tax partner at Financial Planner Evelyn Partners, said that today’s figures from HMRC demonstrated how the freezing of the thresholds will draw more people into the IHT net.

She said: “Coming fast on the heels of Jeremy Hunt’s Autumn Statement, if anyone needed a reminder of the stealthy growth of inheritance tax, it’s here in the form of fresh data showing rising receipts from death duties. The latest 14% annual rise in IHT revenues for the Treasury shows how effective the allowances freeze – which has been in place since 2009 in the case of the main £325,000 nil-rate band – already is in drawing more assets into the IHT net.

“This process will, in all probability, continue apace up to 2028 as fiscal drag does its work under the radar. Even with a moderation in property and investment asset prices, estates that come to probate will be sitting on years or decades of growth, thanks in large part to the hard work and prudence of the post-war generations.”

Andrew Tully, technical director at Canada Life, said the continuing increases in IHT receipts should drive more people towards financial and estate planning.

He said: “The latest data shows we are already on the path to deliver record IHT receipts for the Chancellor this year. Extending the freeze on tax thresholds for a further two years will inevitably mean more estates will fall into the IHT tax net, despite the predicted house price correction coming.

“The legacy from the pandemic and last weeks’ Autumn Statement should mean more people are open to discussing estate planning with family.”