How estate taxation has changed over time
A growing share of estates has become liable to inheritance tax in recent years. In the tax year 2020 to 2021, 3.73% of UK deaths led to an inheritance tax charge; by 2022 to 2023 that had risen to 4.62% (HMRC, Inheritance Tax liabilities statistics). Frozen thresholds alongside rising asset values are part of the picture, though a reporting change from January 2022 also affects the comparison.
| Tax year | Taxpaying estates | Share of UK deaths | Average IHT bill |
|---|
| 2020 to 2021 | 27,000 | 3.73% | £214,000 |
| 2022 to 2023 | 31,500 | 4.62% | £212,000 |
Source: HMRC, Inheritance Tax liabilities statistics. Reporting requirements changed from 1 January 2022, so figures either side of that date are not directly comparable. Subject to revision.
Reliefs reduce the taxable total. Estate values reported to HMRC are before reliefs and exemptions are applied. In the tax year 2022 to 2023, the spouse or civil partner exemption removed around £5.98 billion of assets from charge across roughly 5,070 estates, and agricultural and business property reliefs together were set against about £5.28 billion of assets (
HMRC, tax year 2022 to 2023, subject to revision). A high gross estate value does not always translate into tax.
What the numbers mean
Read together, the data suggests that a large estate and a taxable estate are not the same thing for most families. Fewer than one in twenty deaths currently produces an inheritance tax bill, and the estates that do pay tend to be worth over £1 million (HMRC, tax year 2022 to 2023). For the typical household, whose main asset is a home worth close to the £270,080 national average (UK HPI, April 2026), the estate may well sit within the available tax-free thresholds.
That balance can shift, however. Thresholds are frozen until the end of the 2030-31 tax year (5 April 2031) while property and other asset values may keep rising (gov.uk, as at July 2026, subject to change). In our view, that is why more families than before find it worth checking where their estate sits relative to the thresholds, rather than assuming inheritance tax is only a concern for the very wealthy. This is general information, and anyone weighing up their own position may find it worth discussing with a qualified professional.
A big estate and a taxable estate are not the same. Most estates fall below the threshold; the average taxpaying estate is a different, and much larger, figure.
How estate values relate to inheritance tax thresholds
Whether an estate pays tax depends on its value against the available allowances. Each person has a nil-rate band of £325,000, and up to a further £175,000 residence nil-rate band where a home passes to direct descendants, so a couple may be able to pass on up to £1 million between them (gov.uk, as at July 2026, subject to change). Tax is charged at 40% on the part of an estate above the available thresholds, or 36% where at least 10% of the net estate is left to charity Source: gov.uk, as at July 2026, subject to change.
Because the average estate value for most households sits below those combined allowances, many estates pay no inheritance tax at all. Where an estate is larger, the residence nil-rate band is reduced for estates above the £2 million taper threshold (gov.uk, as at July 2026, subject to change). Our estate planning guide sets out how these allowances fit alongside wills and trusts, Inheritance Tax Explained covers the rules in more depth, and you can compare these estate figures with the average inheritance received by beneficiaries.
Sources and methodology
Every statistic on this page comes from a named official source and was checked against the live publication in July 2026. Estate and inheritance tax figures are drawn from HMRC national statistics for the tax year 2022 to 2023, and house price figures from the UK House Price Index for April 2026. Where HMRC notes that a reporting change from January 2022 affects comparability, that caveat is carried through here.
- HMRC, Inheritance Tax liabilities statistics (tax year 2022 to 2023). Average value of taxpaying estates, number of taxpaying estates, share of deaths charged, average bill, total liabilities, reliefs and asset composition. gov.uk
- UK House Price Index summary, April 2026 (ONS and HM Land Registry). Average UK house price and national breakdowns, provisional. gov.uk
- HMRC, How Inheritance Tax works: thresholds, rules and allowances. Nil-rate band, residence nil-rate band, rates and taper threshold. gov.uk
- HM Treasury / HMRC, nil-rate band and residence nil-rate band from 6 April 2028. Freeze of thresholds to the end of the 2030-31 tax year (5 April 2031). gov.uk
Frequently asked questions
What is the average estate value in the UK?
No single official average covers all UK estates, because most are too small to report in detail. HMRC does publish values for estates that pay inheritance tax, and these averaged around £1.3 million for men and £1.2 million for women in the tax year 2022 to 2023 (HMRC, 2022 to 2023). Most estates are worth considerably less.
How many estates actually pay inheritance tax?
Relatively few. In the tax year 2022 to 2023, around 31,500 estates paid inheritance tax, equal to 4.62% of UK deaths (HMRC, 2022 to 2023). That means well over 95% of estates paid none, generally because their value fell within the available nil-rate bands. The share has been rising gradually in recent years.
Why is the average taxable estate so much larger than a typical estate?
Because only estates above the tax-free thresholds appear in the taxpaying figures. An estate generally becomes liable once its value passes the £325,000 nil-rate band, plus any residence nil-rate band (gov.uk, as at July 2026, subject to change). The estates that clear those thresholds tend to be well over £1 million, which pulls the taxable average far above what a typical household leaves.
How much of an estate is usually property?
For most estates, property is the largest single asset. HMRC notes that estates below £1 million in net value tend to consist mainly of residential property and cash, with securities more common in larger estates (HMRC, 2022 to 2023). With the average UK home at £270,080 in April 2026 (UK HPI, April 2026), house prices strongly shape estate values.
Does the average estate value differ across the UK?
It can, largely because house prices differ. In the year to April 2026 the average home was £291,000 in England, £212,000 in Wales and £192,000 in Scotland (UK HPI, April 2026, provisional). Inheritance tax rules described here apply in England and Wales; Scotland and Northern Ireland have separate succession law, though the same inheritance tax thresholds apply UK-wide.
Will more estates become taxable in future?
That is possible but not guaranteed. Inheritance tax thresholds are frozen until the end of the 2030-31 tax year (5 April 2031), while asset values may continue to rise (gov.uk, as at July 2026, subject to change). If that pattern holds, a slowly growing share of estates could become liable, which is why some people choose to review where their estate sits over time.
About Fairchild Oldfield
The Fairchild Oldfield team brings together estate planning, tax, independent financial advice and client care, working with families across England and Wales.
Fairchild Oldfield are estate planning specialists and will writers, not a firm of solicitors. This article is general information based on practical experience and published data, not legal, tax or financial advice.
Important: This article is general information only and is not legal, tax or financial advice. Reading it does not create a professional relationship. It is based on the law of England and Wales, and other UK jurisdictions may differ. Figures and rules are current or the latest available as at July 2026 and are subject to change or revision. Statistics are drawn from named official sources and were verified live at the time of writing. Before acting, many people choose to seek advice from a suitably qualified professional, such as a solicitor, a STEP practitioner, an accountant, or an FCA-authorised financial adviser, who can consider their individual circumstances.
