UK inheritance tax hits record high with pensions next in line
Key Points
- Inheritance tax receipts for June 2026 are the highest on record
- Receipts for April to June reached £2.3 billion, £96 million more than last year
- Tax-free thresholds stay frozen at 2020/21 levels until 2030/31
- Pensions become liable for inheritance tax from April 2027
- Quilter urges families to review estate plans based on known rules, not speculation
Inheritance tax receipts for June 2026 are the highest on record, with HMRC collecting £2.3 billion between April and June, £96 million more than the same period last year.
HMRC published the figures in its monthly tax receipts bulletin on Tuesday (21 July), which confirmed that June set a new monthly record for the tax.
The tax authority expects receipts to keep climbing in the coming years. It points to higher volumes of wealth transfers following recent liable deaths, rising asset values, and the government’s decision to hold tax-free thresholds at their 2020/21 levels up to and including the 2030/31 tax year.
The nil-rate band has sat at £325,000 since 2009, and rising property and investment values mean more ordinary estates now cross the line each year.
HMRC noted that monthly figures can swing on a small number of higher-value payments, as seen in April and December 2025, but the underlying trend remains upward while thresholds stay frozen and asset values rise.
Pensions join the net from April 2027
The bigger change for households arrives in April 2027, when unspent pensions become liable for inheritance tax for the first time.
Quilter tax and financial planning expert Shaun Moore noted that the direction of travel is already clear. “Frozen thresholds and the inclusion of pensions from April 2027 point towards steadily rising liabilities, placing greater emphasis on early and proactive estate planning based on the known rules,” he said.
“With just a matter of months before pensions become liable to IHT it is worth reviewing plans to see if they are fit for the future.”
Speculation about wider reforms
Moore said questions about the future of wealth taxation are likely to intensify, noting that Prime Minister Andy Burnham has previously argued for reform of wealth taxes and expressed support for alternatives to the current inheritance tax system.
However, he cautioned families against acting on rumours. “There is already speculation about whether ministers could revisit aspects of estate, property or wealth taxation as they search for revenue,” he said.
“Families should be cautious about making planning decisions based on rumours rather than policy. The reality is that major reforms often take time to develop and implement.”
Still, the practical effect is that estates which would have escaped the tax a decade ago now face a bill, and from next April, pension pots that many savers assumed would pass to family tax-free will count towards it.
