Why are inheritance tax receipts rising and what can you do?

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Archived article Tax, investments and pension rules can change over time so the information below may not be current. This article was correct at the time of publishing, however, it may no longer reflect our views on this topic.

Years of frozen inheritance tax (IHT) thresholds mean more people are paying inheritance tax. We take a look at the basics of IHT and what you can do to pay less.

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

14 August 2023

Inheritance tax receipts have been climbing since 2009. More recently the 2021-22 financial year saw a 14% rise. This was the biggest rise since the 2015-16 financial year.

There are two main reasons for soaring IHT receipts.

Sadly, the effects of COVID-19 are still being felt. The peaks in IHT revenue align with surges in deaths due to the virus in 2020 and 2021. But the virus hasn’t gone away entirely and is sadly still taking lives.

But COVID-19 isn’t solely to blame. The government’s decision to freeze IHT thresholds has meant more estates have slipped over the line and become liable.

Some refer to this as a ‘stealth’ tax because more people will fall into it without realising it due to the threshold freeze over the