The government’s inheritance tax (IHT) receipts reached £7.6bn in the 11 months to February 2025, beating the previous record annual tax take with a month of the tax year still remaining, the latest figures from HMRC have shown.

The £7.6bn of IHT receipts between April 2024 and February 2025 represented an 11 per cent (£0.75bn) increase compared to the same period in 2023/24, and exceeded the £7.5bn for the whole of 2023/24.

IHT receipts have been steadily increasing, hitting four consecutive years of all-time highs, with the nil-rate band and residence nil-rate band remaining frozen until 2030.

This was compounded by rising property prices, especially in the south east, bringing more families into the 40 per cent tax charge on inherited wealth.

“Further policy changes will only exacerbate the issues,” commented Quilter tax and financial planning expert, Shaun Moore.

“Restrictions on Agricultural Property Relief and Business Relief from April 2026 could place additional strain on family-owned farms and businesses, while from April 2027, unused pensions will also fall within the scope of IHT.

“What was once a tax on the wealthiest estates is increasingly burdening middle-income families with no obvious route for mitigation.

“Despite repeated calls for reform, the government continues to rely on IHT as a growing source of revenue. Without intervention, the number of families caught in the IHT trap will continue to rise, forcing many to rethink their estate planning strategies.”

HMRC also published its figures on capital gains tax (CGT) receipts, which hit £1.3bn in February 2025.

This brought the total CGT take in the 12 months to February to £13bn, which was slightly lower than 2023/24’s corresponding figure of £14.5bn.

“The government’s decision to slash the Annual Exempt Amount (AEA) to just £3,000 - down from £12,300 two years ago—means that even relatively small disposals now trigger a CGT bill,” Moore said.

“Combined with last October’s rate increases, which saw basic rate CGT rise from 10 per cent to 18 per cent and higher rate CGT from 20 per cent to 24 per cent, this has led to an increase in tax paid on investment gains.

“The long-term trajectory of CGT revenues underscores its growing role in the Treasury’s tax strategy. A decade ago, CGT receipts stood at just £3.91bn per year; today, they have soared to nearly £10bn more per year. Successive governments have used a combination of lower allowances and higher rates to steadily expand the number of people affected.

“However, the surge in CGT receipts may not be permanent. The higher rates create a strong incentive for investors to defer sales, avoiding tax where possible. If more taxpayers take this approach, future receipts could begin to slow despite the harsher tax environment.”

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