Inheritance tax receipts rose to £4.4bn in six months to September

HM Revenue and Customs reported that inheritance tax receipts rose to £4.4 billion for the six months to the end of September, an increase of £100 million, or 2.3 percent, compared with the same period a year earlier. The figures, published on October 21, underscore a continuing upward trend in inheritance tax revenues that analysts say is being driven by frozen tax thresholds and rising asset values across the United Kingdom.

Officials and industry analysts point to several structural factors pushing more estates into the tax net. The nil rate band, the basic tax-free allowance, has been frozen at £325,000 since 2009, and the residence nil rate band, which applies when a main home is passed to direct descendants, has remained at £175,000 since 2017. Rising property prices and other asset appreciation have therefore increased the number of estates exceeding those thresholds, a process known as fiscal drag.

Forecasters expect receipts to keep climbing. The Office for Budget Responsibility projects inheritance tax revenue could exceed £9 billion by 2026 and potentially reach £14 billion by 2030. Industry forecasters offer slightly different estimates for the current year, with...