Inheritance Tax Receipts Hit £1.5 Billion in Two Months
New figures from HM Revenue and Customs (HMRC) show that inheritance tax (IHT) brought in £1.5 billion during the first two months of the 2025–26 tax year. This is £98 million more than during the same period last year, continuing a steady rise in tax receipts over the past 20 years.
Possible U‑Turn on Non‑Dom Inheritance Tax
Chancellor Rachel Reeves is reportedly thinking again about applying inheritance tax on assets belonging to non‑domiciled individuals (non‑doms) that are held abroad. Before Labour took power, the party expected this charge to bring in £430 million a year. But the Office for Budget Responsibility (OBR) later said it would likely be only half of that.
Making this change has already slowed down the prime London property market. The Financial Times reports the chancellor is now considering tweaking the rules to respond to that slowdown.
How People Are Trying to Cut IHT
Dyall explains that some people give away money during their lifetime to reduce IHT. They might use regular small gifts or larger gifts with the 7 year rule of inheritance. But he warns that future tax changes could make this harder.
40% Tax on Global Wealth Hits Non‑Doms
From April, non‑doms are subject to a 40% inheritance tax on their worldwide assets. The Financial Times says this is the likely reason some wealthy non‑doms are leaving the UK.
But the Treasury insists the UK is still attractive. They point out that capital gains tax here is lower than in other G7 countries, and the new tax regime is simpler and more transparent. They say these changes make the UK fairer and remain appealing to investment and talent.
Wealth Expert: Tax May Backfire
Nicholas Hyett, investment manager at Wealth Club, says rumours of a U‑turn may be because many wealthy non‑doms are leaving. He believes the tax would raise less than expected and cost more in lost spending, investment, and charitable gifts.
He warns this could damage the UK’s reputation. “It’s a shame the government will only listen once the numbers start to do the talking,” he explained:
IHT Receipts Rise Year After Year
Ian Dyall, head of estate planning at Evelyn Partners, says inheritance tax receipts keep climbing. This is because inflation pushes more estates above the tax-free threshold, which has not changed for years.
He expects receipts to grow further as reliefs on business and agricultural assets are reduced. He also warns that from April 2027, pensions will come under IHT, creating extra planning issues.
