After the UK's revenue department released latest inheritance tax receipt data, showing another increase, wealth managers react and examine ways of mitigating the impact.

As speculation climbs on potential tax changes under the new government led by Andy Burnham, latest monthly figures from HM Revenue & Customs show that inheritance tax (IHT) receipts for April 2026 to July 2026 were £3.2 billion ($4.4 billion), which is £0.1 billion higher than the same period last year.

“We should not be surprised to see the uptick in inheritance tax receipts,” Michelle Holgate, wealth manager at RBC Brewin Dolphin, said in a note. “The freezing of the current nil-rate band at £325,000 and the residence nil-rate band at £175,000 until 2031 means that more people are finding themselves paying inheritance tax for the first time. This will likely increase even further next year with major changes on how IHT is applied to unused pension pots coming into effect from 6 April 2027.”

“That will mean more families will become subject to IHT and estates that are already facing an IHT bill could be looking at an even greater one,” Ian Dyall, head of estate planning at UK wealth manager Evelyn Partners, added. “The beneficiaries of those older than 75 are at risk of a super-sized tax burden from next April as they could also pay income tax at their marginal rate when they withdraw funds from the pension, after it’s already been depleted by IHT. That could mean they end up with not much more than a third of the value of the pension left by the saver.”

"Moreover, an ageing population will drive a rise in IHT liabilities in the coming years, as the wealthy Boomer generation enters late life, with the Office for Budget Responsibility (OBR) recently forecasting that receipts will rise to 1.4 per cent of GDP by 2030/2031,” Dyall continued.

“For many families, the question is increasingly how they should use their wealth throughout retirement. That could mean reconsidering which assets to draw from first, how much to gift during their lifetime, or simply feeling more comfortable spending their pension,” Lee Quinn, chartered financial planner at Titan Wealth, added. “With the rules changing, having a retirement and estate plan that work together has never been more important,” Quinn said.

Gifting money or assets is a simple way of cutting an inheritance tax bill. People can give up to £3,000 a year tax-free to anyone, or unlimited gifts to their spouse or civil partner. But gifts made within seven years of death may still be taxed. Trusts can also move assets out of an estate, so they’re no longer counted when IHT is calculated.

Married couples and civil partners can pass everything to each other tax-free, including property. A will gives control. Without one, an estate follows set rules and may face a bigger tax bill. An up-to-date will helps people make the most of exemptions to ensure that money goes where it should.

“The spousal exemption becomes even more valuable after next April, as it is pretty much the only way to ensure a bequeathed pension will not be subject to IHT, on the first death at least,” Dyall continued. “That means not just that pension savers should check their beneficiary nominations, as many will have put down their children under the current regime, a choice that might need rethinking. But also that elderly, long-term co-habiting partners with significant pensions might consider getting married for a big tax saving on the first death – as was widely covered in the media this week after Ricky Gervais revealed he is considering marrying his long-term partner for this very reason.”

“When considering IHT and estate planning, it is essential to take a holistic and forward-looking approach; balancing tax-efficiency with financial security and long-term needs, such as funding for care,” Corrinne Emmett, senior business development manager at ZEDRA, said. “Advice from a suitably qualified professional is crucial in navigating this increasingly complex landscape but key considerations should be keeping your will up to date, putting in place Lasting Powers of Attorney, making use of gifting allowances where appropriate and considering the use of trusts, which can be a tax-efficient way to pass on wealth whilst retaining a degree of control.”

See more here about upcoming changes to inheritance tax from Nick Ritchie at RBC Wealth Management who shares his thoughts on emerging trends about philanthropic gifting.