Rising property values are pulling increasing numbers of families into the inheritance tax (IHT) net, often without them realising it, homeowners are being warned.
IHT receipts totalled £7.1bn between April 2025 and January 2026, according to the latest HM Revenue & Customs (HMRC) data, up £100m compared with the same period last year.
The Office for Budget Responsibility has forecast IHT will generate £9.1bn in the current tax year. Alongside recently confirmed Budget measures and legislation, the figures indicate the government is on course to meet that target with two months remaining.
Ian Dyall, head of estate planning at wealth management firm Evelyn Partners, said: “The recent monthly increases in the overall IHT take have been fairly modest, compared to the trajectory we’ve been used to, which could reflect the levelling off of house prices in the UK over the last few years. I suspect underneath the overall figure there will be an upturn of IHT taken from UK regions outside the South East. The South East has traditionally made up the lion’s share of IHT liabilities and that will continue to be the case for a long time, given several decades of wealth creation in the region.
“But property values in and around London have levelled off in recent years, and even fallen in real terms in some areas compared to general inflation, while elsewhere in the country house prices had seen double-digit annual increases. That could mean many families in the South West, Midlands and North of England are being dragged into the potential IHT net by the increase in their home’s value, probably without realising it.
“We would suggest that families anywhere in the country whose property wealth looks it will use up their nil-rate bands should be considering some form of estate planning, particularly if they have pensions that could add to their estate’s taxable value from April 2027.
“Of course the slowing growth of the IHT take could also be due to greater awareness of the tax and of steps that can be taken to mitigate it.”
Isaac Stell, Investment Manager at Wealth Club, believes that the government has made a “pig’s ear” of inheritance tax reform.
He explained: “Crackdowns on farmers and business owners proved unpopular and ultimately unworkable, forcing a partial retreat on relief thresholds. But years of frozen allowances, combined with new rules that will bring pensions into the scope of IHT, mean more ordinary families, not just the wealthy, are being pulled into the tax net.
“At the same time, HMRC’s tougher enforcement is adding further pressure at what is already a difficult time for bereaved families.”
