Inheritance tax receipts rocketed to a new record high in the three months to September 2026, as rising asset values and frozen thresholds expanded the tax to hit more ordinary households.

Receipts hit £4.7bn over the period, according to the latest figures from HMRC, a seven per cent increase from the prior year where receipts reached £4.3bn.

In September alone, inheritance tax (IHT) receipts hit a record monthly high of £936m, up from £671m in 2025. This also surpassed the previous high of £871m recorded in June.

“IHT… remains a persistent and unavoidable inheritance tax planning issue, and one that should not be ignored,” said Samantha Warner, legal director at Winckworth Sherwood.

The Office for Budget Responsibility (OBR) forecast that receipts will hit £9.5bn by the end of the 2026/27 financial year, up from £8.5bn the previous year.

Increased exposure

The rise has long been blamed on Rachel Reeves’ decision to extend the freeze on income tax thresholds to 2031 in last year’s Autumn Budget.

Assets, including property and investments also continue to rise in value, leading them to be pulled into the net and expose more middle-class families to the tax.

The nil-rate band has remained at £325,000 since 2009, while house prices have steadily climbed, particularly in the South East. Average house prices in the region hit £380,000 last month, while London prices reached £554,000.

But Sarah Coles, head of personal finance at AJ Bell, said the “pain has only just begun” for middle-class families, and the introduction of pensions being subject to IHT from next April will only “make matters worse”.

This is expected to drag another 10,500 estates into the inheritance tax net that year, hike the amount of tax paid by 38,500 estates and increase the tax due by £34,000 each on average.

Lee Quinn, chartered financial planner at Titan Wealth, said: “IHT is firmly in focus with just a week to go till the Budget. With receipts moving higher, families will be watching closely to see whether the Chancellor decides to make any further changes.

“If the Budget brings anything further, families may need to review how that affects their plans around retirement, gifting and passing wealth on.”

September windfall?

Despite the OBR forecasting a year-on-year increase, Tim Stovold, head of tax at Moore Kingston Smith, argued receipts may soon drop off.

“The FTSE reached a record high in February, and the government is benefitting from the high asset values earlier in the year. Cooling of the stock market and house prices since may mean that future IHT collection also tails off,” Stovold said.

But advisers continued to urge Brits to be aware of their possible exposure to IHT in order to avoid significant tax liabilities, in particular before the changes take effect in April 2027.