Inheritance tax over time
The direction of travel is upward. Total inheritance tax liabilities created rose to £6.70bn in the 2022 to 2023 tax year, a 12% increase of £710m on the £5.99bn recorded for 2021 to 2022, while the share of deaths triggering a charge rose from 4.39% to 4.62% (HMRC IHT liabilities statistics, 2022 to 2023). HMRC links the rise to higher asset values and frozen thresholds.
| Tax year | IHT liabilities created | Share of UK deaths charged |
|---|
| 2021 to 2022 | £5.99bn | 4.39% |
| 2022 to 2023 | £6.70bn | 4.62% |
Source: HMRC Inheritance Tax liabilities statistics commentary, tax year 2022 to 2023 (2021 to 2022 figures as stated in the same release). Liabilities are the tax created on estates for deaths in the year, which differ from cash receipts.
A note on what these figures measure. HMRC "liabilities" statistics count the tax arising on estates of people who died in a given tax year, which is not the same as the cash the Exchequer receives in that year. The awareness percentages come from separate opinion surveys of specific groups, such as adults, over-55s, or homeowners aged 45 and over. They are useful as a signal of public understanding rather than a precise population figure, and different providers sample different groups, so the numbers are not directly comparable.
What the numbers mean
Taken together, the data points to a mismatch: exposure to inheritance tax is rising, yet understanding of it is not keeping pace. Only a small minority feel confident about the core allowances, most are unaware of the pension change due in 2027, and a majority of likely-liable homeowners have never worked out a figure (Censuswide for Flagstone, June 2026). In our view, that combination is worth watching rather than a cause for alarm.
A few careful conclusions seem reasonable. First, awareness is uneven: long-standing rules such as the seven-year gifting window and the value of a will are relatively well known, while newer or more technical rules are not. Second, the households most likely to be affected are not always the best informed, which can leave families making decisions late. Third, because thresholds are frozen while asset values move, the share of estates within scope may continue to drift upward, though that depends on future policy and markets and cannot be assumed.
Rising exposure and low understanding is an awkward pairing. It tends to reward starting the conversation early rather than after a life event forces it.
None of this points to a single right answer for any one family. What the figures do suggest is that many people would benefit from checking where they actually stand, which often starts with a valid, up-to-date will. Our guide on How to Write a Will covers that first step, and where the tax position looks material, it can be worth discussing it with a qualified professional who can consider your full circumstances.
Scotland and Northern Ireland
Inheritance tax is a UK-wide tax, so the thresholds and rates above apply across all four nations (gov.uk, as at July 2026, subject to change). What differs is the surrounding law of succession. Scotland has its own rules, including legal rights that can give a spouse and children a fixed share of an estate, and it uses confirmation rather than a grant of probate. Northern Ireland has a separate but broadly similar system to England and Wales. Where an estate spans more than one jurisdiction, it can be worth taking advice in each.
Sources and methodology
This article combines official statistics with independent survey research. Official figures on estates and liabilities are taken directly from HMRC; awareness figures are drawn from named survey providers and treated as secondary sources, with the sampled group and fieldwork period shown at each point of use. No figures have been estimated, extrapolated or rounded beyond what each source states.
- HMRC, Inheritance Tax liabilities statistics (tax year 2022 to 2023): estates charged, share of deaths, and total liabilities. gov.uk/government/statistics/inheritance-tax-liabilities-statistics.
- gov.uk, Inheritance Tax (as at July 2026, subject to change): nil-rate band, residence nil-rate band, standard and reduced rates. gov.uk/inheritance-tax.
- YouGov for Mattioli Woods (survey of 2,174 UK adults, fieldwork June 2026, reported July 2026): awareness of allowances, pensions, the seven-year rule, and inheritance conversations. Secondary source, reported by Today's Wills and Probate.
- Standard Life (research, February 2026): awareness of the pension inheritance tax change. Secondary source, reported by Pensions Age.
- Censuswide for Flagstone (survey of 2,000 UK homeowners aged 45+, June 2026): homeowners who have never calculated their liability. Secondary source.
Frequently asked questions
How many people understand inheritance tax in the UK?
Only a minority, on the available survey evidence. In June 2026 research, around 15% of UK adults said they understood the nil-rate band and residence nil-rate band, and 35% understood that pensions could fall within the tax from 2027 (YouGov for Mattioli Woods, June 2026). Awareness of older rules tends to be higher.
What share of estates actually pay inheritance tax?
A small share. HMRC recorded that 4.62% of UK deaths in the 2022 to 2023 tax year resulted in an inheritance tax charge, covering 31,500 estates, which it describes as fewer than 1 in 20 (HMRC IHT liabilities statistics, 2022 to 2023). The proportion has generally been rising as thresholds stay frozen.
Why do so many people misunderstand inheritance tax?
The rules are layered and change periodically, which makes them easy to lose track of. Allowances such as the nil-rate band interact with the residence nil-rate band, spouse exemptions and lifetime gifts, and reforms like the planned 2027 pension change add further moving parts (gov.uk, as at July 2026, subject to change). Many people also assume the tax will not affect them.
Are pensions about to be included in inheritance tax?
Government has announced that most unused pension funds and death benefits are due to fall within inheritance tax from 6 April 2027, though the detail is still being finalised and could change (gov.uk). Source: gov.uk, as at July 2026, subject to change. Survey research in early 2026 found around 89% of adults were unaware of this change (Standard Life survey, February 2026). It can be worth checking the current position before acting.
How much can a couple pass on before inheritance tax?
Potentially up to £1,000,000, in some circumstances. Each person has a £325,000 nil-rate band and up to a £175,000 residence nil-rate band where a home passes to direct descendants, and unused allowances can transfer to a surviving spouse or civil partner (gov.uk, as at July 2026, subject to change). The residence band tapers for larger estates, so outcomes vary.
Where can I find reliable inheritance tax figures?
The primary sources are gov.uk for current thresholds and rates, and HMRC's published statistics for how many estates pay and how much (HMRC IHT liabilities statistics). Independent surveys can indicate public understanding but sample specific groups, so they are best read as a signal rather than a population figure. Figures change, so it is worth checking the date.
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, 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 attributed to gov.uk are current as at July 2026 and are subject to change; survey figures reflect the named research and reference periods shown. 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 your individual circumstances.
