Published June 2026 — based on the latest HMRC monthly tax receipts bulletin
The latest figures from HMRC show that Inheritance Tax receipts for May 2026 totalled £1.4 billion — around £37 million lower than the same month last year. April’s receipts were also down, coming in at £715 million, which was £65 million below the equivalent figure for the previous year.
On the face of it, two consecutive months of lower receipts might suggest the IHT burden is easing. In reality, the picture is considerably more complex — and for many families, the pressure is about to increase rather than diminish.
Why Monthly Figures Can Be Misleading
Monthly IHT receipts naturally fluctuate depending on the timing of estate settlements, the complexity of individual estates, and when payments fall due. A quieter month does not indicate a structural change in the direction of travel — and HMRC itself has confirmed that it expects higher receipts in the coming years, driven by a combination of higher volumes of wealth transfers, rising asset values, and the government’s decision to keep the tax-free thresholds frozen at their 2020-21 levels right through to 2030-31.
In other words, more families will be drawn into the scope of IHT over time — not because the tax rate has changed, but because the value of estates is growing while the thresholds that protect them from tax are standing still.
Frozen Thresholds and the Fiscal Drag Effect
The nil-rate band — the amount you can leave free of Inheritance Tax — has been frozen at £325,000 since 2009. The residence nil-rate band, which provides additional relief where a family home is passed to direct descendants, has been frozen at £175,000 since 2020. Combined, these give a potential threshold of £500,000 for an individual, or up to £1 million for a married couple or civil partnership — but only under certain conditions.
With property values and investment portfolios having risen substantially over recent years, many families who would previously have had no IHT exposure now find themselves above these thresholds. This effect — often called fiscal drag — is the primary reason HMRC expects receipts to continue climbing, even in months where the headline figure dips temporarily.
The nil-rate band is confirmed to remain frozen until at least 2031, which means the number of affected estates is expected to keep rising for the foreseeable future.
The 2027 Pension Change — A Significant Shift
Perhaps the most significant change on the horizon is the planned inclusion of unused pension pots within the taxable estate from April 2027. Under current rules, pension funds that remain undrawn at death are generally outside the scope of Inheritance Tax — meaning pensions have long been used as a tax-efficient way to pass wealth to the next generation.
From April 2027, this is set to change. Unused pension funds will be included in the value of your estate for IHT purposes, which will significantly increase the number of families facing a liability — and substantially increase the size of many existing liabilities. We are now in the final year in which pension wealth remains outside IHT scope, which makes this an important time to review your position.
Important: The pension and IHT changes planned for April 2027 are significant and complex. The right approach will depend entirely on your individual circumstances. We strongly recommend speaking to a qualified adviser before making any decisions about your pension or estate planning.
What Does This Mean for Your Estate Planning?
The combination of frozen thresholds, rising asset values, and the planned pension changes creates a clear message: early, proactive planning matters more now than at any point in recent memory. Many of the most effective strategies for reducing an IHT liability — such as lifetime gifting — rely on time, since gifts only fall outside the estate after a qualifying period of up to seven years. The longer you leave it, the fewer options remain available.
There are a number of legitimate and well-established approaches to managing an IHT liability, which may include:
- Making use of annual gift exemptions and other gifting allowances
- Placing assets into trust to remove them from your estate
- Reviewing the structure of pension withdrawals in light of the 2027 changes
- Considering investments that qualify for Business Relief, which can fall outside the estate after two years
- Ensuring your Will is up to date and structured to make the most of available reliefs
The right combination of these will depend entirely on your personal circumstances, the size and composition of your estate, and your wishes for how your wealth is passed on. This is not a one-size-fits-all area — which is why tailored, professional advice is so important.
How Retirement Professionals Can Help
At Retirement Professionals, Inheritance Tax and Estate Planning is one of our core specialisms. Our FCA-regulated advisers work with individuals and families across Greater Manchester and throughout the UK to help them understand their potential IHT exposure and put a plan in place to protect more of their estate for the people who matter most.
We consider your full financial picture — including your pensions, investments, property, and other assets — and explain the options available to you in plain English, with no jargon and no pressure. With the April 2027 pension changes approaching, now is an ideal time to review your position.
You may also find our Pensions FAQ page and Glossary of Retirement Terms useful if you’d like to understand the terminology around IHT and estate planning before speaking to an adviser.
Speak to an Adviser About Your Estate
Free initial consultation, no obligation to proceed.
This article is based on publicly available HMRC data and is intended for general information purposes only. It does not constitute personal financial or tax advice. Inheritance Tax planning is based on our current understanding of HMRC rules and legislation, which may change. Tax treatment depends on your individual circumstances. Trusts are not regulated by the Financial Conduct Authority. The proposed changes to pension IHT treatment from April 2027 are subject to final legislation and may be subject to change.
Retirement Professionals Ltd is an appointed representative of pi financial ltd, authorised and regulated by the Financial Conduct Authority. FCA number 622943.