Inheritance tax (IHT) receipts rose 2% to £8.5bn in the 2025/26 tax year (2024/25: £8.2bn), marking a fifth consecutive annual record.
IHT receipts in March were £755m, an increase of £141m compared to February 2025.
The Government expects to see a continued increase in the IHT take with thresholds frozen until 2031, the abolition of the non-dom regime, and the upcoming inclusion of unused pension pots within the IHT scope from April 2027.
Ian Dyall, head of estate planning at Evelyn Partners, said that despite cooling house price rises he expects to continue to see IHT receipts to continue to rise.
He said: “That softening is probably slowing the extent to which purely inflation-driven growth has pushed estates over IHT thresholds, particularly for those whose wealth is concentrated in property rather than diversified investments.
“Yet receipts are still rising, because with decades of wealth accumulation and many years of frozen allowances, even modest asset growth can inflate IHT bills, regardless of medium‑term property market movements. Meanwhile, an ageing population means more estates, and more estates belonging to the asset-rich boomer generation, are being assessed as time goes by.”
Nick Henshaw, inheritance tax expert at Wesleyan Financial Services, said the mutual’s research shows nine in ten advisers are already reporting increased pension withdrawals.
He said: “For advisers, the focus has to be on modelling before action. If a strategy doesn’t improve the overall outcome after tax and risk, it shouldn’t be happening. In volatile conditions, approaches that help manage sequencing risk – such as smoothed funds – can also play a role in avoiding poor timing decisions becoming permanent damage.
"The message is simple: don’t let urgency drive poor decisions. Without proper advice, the rush to reduce IHT could leave clients worse off in retirement.”
Capital Gains Tax also surged past their previous annual record (2023/3 £16.9bn) to £22.2bn in the 2025/6 tax year. They also exceeded the Office for Budget Responsibility (OBR) forecast of £20.3bn made at the Autumn Budget 2025.
In March CGT receipts were £496m, an increase of £84m year-on-year.
The OBR expects CGT receipts to reach £27.3bn by 2029/30.
Marc Acheson, global wealth specialist at insurance-based wealth manager Utmost, said it has seen an increased demand for financial advice as clients seek clarity on the implications of the higher CGT rates and frozen thresholds introduced at the Autumn Budget 2024.
Rachael Griffin, tax and financial planning expert at Quilter, said the changes to CGT policy alone should not hold the full blame for the rise.
She said: “This surge reflects a combination of a supportive investment environment and recent policy changes. Equity markets have been strong and asset prices have recovered well over the past year, which has naturally increased the pool of gains available to be realised.
“However, policy has clearly amplified that effect. The annual exempt amount has been cut from £12,300 to £3,000, while CGT rates on shares and other investments were raised in October 2024 from 10% and 20% to 18% and 24%, significantly increasing the tax due on each disposal.
“That combination appears to have encouraged some investors to bring forward decisions and crystallise gains sooner than planned, boosting receipts this year. Whether this marks a new, structurally higher level of CGT revenue or simply a one‑off response to a policy shock remains to be seen.”