HMRC Inheritance Tax Statistics 2025: Key Insights

Record IHT Receipts

HMRC collected £7.5 billion in inheritance tax in 2024/25, a record high and 15% increase from the previous year. This continues the upward trend driven by:

• Rising property values
• Frozen nil-rate bands since 2009
• Increased wealth among older generations
• More estates exceeding the threshold

More Estates Paying IHT

The number of estates paying inheritance tax has increased by 25% over the past five years:

• 2020/21: 24,500 estates
• 2021/22: 26,800 estates
• 2022/23: 28,300 estates
• 2023/24: 29,900 estates
• 2024/25: 30,600 estates (estimated)

This represents approximately 4% of all deaths, up from 3% five years ago.

Regional Variations

Inheritance tax is heavily concentrated in certain regions:

• London and South East: 55% of all IHT paid
• Average estate value in London: £850,000
• Average estate value in North East: £320,000
• Highest risk areas: Richmond, Kensington & Chelsea, Westminster

Use of Reliefs and Exemptions

HMRC data shows how estates use various reliefs:

• Spouse exemption: Used by 68% of estates
• Residence nil-rate band: Claimed by 45% of taxable estates
• Business property relief: £2.1 billion of relief claimed
• Agricultural property relief: £450 million of relief claimed
• Charitable donations: £800 million given, reducing IHT by £320 million

Trends in Estate Planning

The data reveals growing awareness and use of planning strategies:

• 20% increase in use of deeds of variation
• Growing use of life insurance to cover IHT bills
• More estates using trusts for asset protection
• Increased lifetime gifting, particularly among over-70s

Looking Ahead

Projections suggest IHT receipts could reach £10 billion by 2028/29 if current trends continue. With allowances frozen until at least 2030, more families will need to consider inheritance tax planning.