HMRC has confirmed a significant tax rule change that will see 10,500 more households pursued for inheritance tax. The Labour government's tax arm has recouped an extra £730 million as more estates become liable for the charge.
Inheritance tax receipts rise
Figures show inheritance tax receipts reached £730 million in May 2026, up from £701 million a year earlier. Shaun Moore, tax and financial planning expert at Quilter, said: "While monthly figures can fluctuate, the broader direction remains clear, with more estates being drawn into scope as thresholds remain frozen and asset values persist."
What is inheritance tax?
Inheritance Tax is a wealth transfer tax on the estate of someone who has died, including property, money, and possessions. From 6 April 2027, this measure will increase Inheritance Tax liabilities for estates containing inheritable pension wealth, reducing the inheritance received by beneficiaries.
Impact on estates
HMRC does not hold complete data on beneficiaries, as it is not required for tax administration. Most estates will still have no Inheritance Tax liability after 6 April 2027. However, the government estimates that of around 213,000 estates with inheritable pension wealth in 2027-28, 10,500 will face a liability where previously they would not.
Mr Moore added: "We are also now firmly in the final year where pension wealth remains outside the scope of Inheritance Tax, with unused pension pots due to be brought within the taxable estate from April 2027. That will significantly increase the number of families facing a liability."
Expert reactions
Nick Henshaw, Head of Intermediaries Distribution at Wesleyan, said: "With less than a year to go until pensions are liable for inheritance tax, many advisers are doing what they can to support clients in planning ahead. But detailed guidance is still lacking from HMRC at this point, leaving a lot of guesswork and making giving clear advice a challenge."
Sarah Coles from Hargreaves Lansdown commented: "Inheritance tax is positively Byzantine in its complexity, so while most people have got to grips with some of the basics, there will be a myriad of rules they have no idea at all about."
Approximately 38,500 estates will pay more Inheritance Tax than previously, with the average liability expected to increase by around £34,000 when pension assets are included.
