HMRC’s latest figures show that inheritance tax receipts for the period of April 2024 to January 2025 are £7.0bn, up by £0.7bn compared to the same period last year.
In the 12 months to January 2025, total CGT receipts have now reached £14.56bn, similar to the £14.59bn collected in the same period last year.
Marc Acheson, global wealth specialist at Utmost Wealth Solutions, said: “January’s Capital Gains Tax figures highlight another fiscal revenue stream that is delivering record sums to the Treasury. The surge in CGT receipts was likely driven by lots of people triggering gains ahead of the Autumn Budget. The increase in CGT rates and reduction of the lifetime limits for Investors’ Relief announced at the Budget are set to drive further increases in CGT totalling around £1.5 billion through the rest of this tax-year and 2025/26.
“Inheritance Tax is also delivering record receipts for the Treasury as property values soar while the thresholds remain frozen – a policy that has now been extended until the end of the decade. It now looks increasingly likely that IHT receipts for this financial year will surpass the 2023-24 record to deliver an all-time high haul for the Chancellor.
“Additional reforms, including IHT charges on pension wealth at death, restrictions on agricultural and business reliefs, the application of periodic and exit charges to excluded property trusts and the removal of the non-dom status which will subject those UK resident for over 10 years to a 40% IHT charge on death on their global estate from April, will further increase the IHT tax-take over the coming years.”
“We have seen a sharp increase in clients seeking professional advice to ensure they fully understand the implications of these reforms. With careful planning and the right advice, there are steps people can take to mitigate the impact of Inheritance Tax and changes to Capital Gains.”
Shaun Moore, tax and financial planning expert at Quilter said: “This relentless rise in inheritance tax receipts is baked into government policy. With the nil-rate band (£325,000) and residence nil-rate band (£175,000) frozen until 2030, more and more families are being dragged into paying the tax. Rising house prices, particularly in the South East, mean many people that don’t consider themselves to be wealthy will now find themselves above the threshold and facing a 40% tax bill.
“Farmers and business owners are also feeling the pressure. The upcoming reforms to Agricultural Property Relief and Business Relief could force more family farms and small enterprises into difficult decisions about their futures. A tax once aimed at the wealthiest estates is now creeping further into the middle class, and with unspent pensions set to be taxed from April 2027, the government’s IHT windfall is only set to grow.
“Inheritance tax remains one of the most resented taxes in the UK, yet the government is changing policy so more people than ever will pay it. Without reform, families will continue to find themselves hit with unexpected tax bills on what they hoped to pass down.
On the CGT receipts surge, Moore said: “This trend is being driven by two major forces: the reduced Annual Exempt Amount (AEA) and the increase in CGT rates, which came into effect in October 2024. With the AEA now just £3,000, down from £12,300 two years ago, fewer gains escape tax, and more investors are finding themselves liable for CGT—even on relatively modest asset sales.
“The rise in basic rate CGT from 10% to 18% and higher rate CGT from 20% to 24% has further squeezed those looking to cash in on investments. As a result, many investors have rushed to sell before the changes fully settle in, pushing receipts higher.
“Further analysis shows that CGT receipts have increased by 271% over the past decade, from £3.91 billion in 2013-14 to £14.49 billion in 2023-24. This dramatic rise highlights how CGT has become an increasingly lucrative source of revenue for the Treasury, with successive governments gradually pulling more taxpayers into its net through lower exemptions and higher rates.
“However, this wave of disposals may not last. Higher tax rates create an incentive for ‘tax lock-in,’ where individuals hold onto assets rather than triggering a CGT charge. If that happens, the Treasury’s current CGT windfall may prove short-lived.”
Stephen Lowe, group communications director at retirement specialist Just Group, said: “The latest IHT receipts data for January will be a welcome boost for the Treasury, with the 2024/25 tax year looking almost sure to scoop another all-time record level of IHT revenues. Frozen thresholds and rising asset prices continue to be the main driver of the current record tax take.
“The Chancellor’s Autumn Budget revisions to the IHT regime resulted in the OBR predicting that approximately one in 10 deaths will incur IHT by 2029-30, double the proportion in 2023-24, meaning that within a decade roughly twice as many estates will be hit by IHT.
“We would encourage people to regularly assess the value of their estate, including up-to-date property valuations, to understand whether they could be affected by IHT. Estate planning can be complex, and seeking professional financial advice can help individuals navigate the rules, mitigate potential liabilities, and ensure they pass on as much wealth as possible to their loved ones.”
Andrew Zanelli, head of technical engagement, abrdn said: “IHT receipts are still climbing. This trend is going to continue, and we’ll also see more people affected by the tax. The Office for Budget Responsibility predicts that one in ten estates will have IHT to pay by the end of the decade.
“Nearly all the advisers I’ve been speaking to are being approached by their clients about IHT and a big driver is the plan to make pensions subject to IHT. We’re still waiting on the finer details around how this will happen, but we know the basic facts and the intention for this to be in place by 2027.
“What we’re hoping to be fixed before then is the very real risk of delays to the bereaved receiving their inheritance because of the new process.
“This is a risk that has the potential to cause significant disruption and emotional distress at a very vulnerable time. We, and others, have suggested some alternatives, which we’re urging the government to take on board.”
