Inheritance tax and the wealth transfer
Inheritance tax touches a minority of estates, but a growing one. In the tax year 2022 to 2023, 31,500 estates were liable, equal to 4.62% of UK deaths, and total IHT liabilities were £6.70 billion (HMRC, IHT liabilities statistics, tax year 2022 to 2023, updated 31 July 2025). The number of taxpaying estates rose 13% on the previous year, and liabilities rose 12%, on the same source.
| Inheritance tax measure | Tax year 2022 to 2023 | Change on prior year |
|---|
| Taxpaying estates | 31,500 | +3,700 (+13%) |
| Total IHT liabilities | £6.70 billion | +£0.71 billion (+12%) |
| Share of UK deaths charged | 4.62% | n/a |
| Average effective tax rate on taxpaying estates | 13% | n/a |
| Value passed to surviving spouses / civil partners | £5.98 billion | n/a |
Source: HMRC, Inheritance Tax liabilities statistics, tax year 2022 to 2023 (updated 31 July 2025).
Looking ahead, the Office for Budget Responsibility forecast IHT receipts of £8.7 billion in 2025-26, around 0.7% of all receipts (OBR, November 2025 outlook). One reason more estates may be drawn in over time is that the main thresholds are frozen: the nil-rate band is £325,000 per person and the residence nil-rate band is up to £175,000 where a home passes to direct descendants, both held until the end of the 2030-31 tax year (5 April 2031) (gov.uk, as at July 2026, subject to change). For the mechanics of that tax, our Inheritance Tax Explained guide sets out how the bands work.
Frozen thresholds, rising values. A married couple or civil partners may be able to pass on up to £1,000,000 before inheritance tax by combining two nil-rate bands and two residence nil-rate bands where a home passes to children, and transfers between spouses and civil partners are generally exempt (
gov.uk, as at July 2026, subject to change). Because these bands are frozen while many estate values continue to rise, a larger share of estates may become liable over time. This is general information; every estate is different, and the residence band tapers above a £2,000,000 estate.
Who inherits, and who does not
Inheritances are unevenly spread. Research by the Resolution Foundation found that fewer than one in three people (32%) have received or expect to receive an inheritance or gift, and that recipients are concentrated among wealthier households, with the richest fifth of earners around twice as likely to receive a significant transfer as the poorest fifth (Resolution Foundation, February 2022, named secondary source). The same body projects that the value of inheritances could roughly double over the two decades from 2022, with a peak around 2035. Source: resolutionfoundation.org, February 2022, secondary source, subject to change.
What the numbers mean
Read together, the figures point less to a single windfall and more to a slow, uneven redistribution weighted toward households that already hold assets. The stock of wealth is large, at £12.2 trillion of UK net worth in 2023 (ONS, 2024 edition), yet it is concentrated: the wealthiest 10% of households in Great Britain held £1,200,500 or more in April 2020 to March 2022 (ONS, Wealth and Assets Survey).
In our view, three things stand out. First, the wealth is heavily tied up in property and pensions, which behave differently on death and are taxed differently, so how an estate is composed can matter as much as its size. Second, the frozen thresholds mean the share of estates paying inheritance tax has been climbing and may keep doing so, even though it remains a minority at 4.62% of deaths in 2022 to 2023 (HMRC). Third, because inheritances tend to arrive later in life and flow to those who already have assets, they may widen rather than narrow existing gaps. These are general observations from published data, not predictions, and individual circumstances vary widely.
The great wealth transfer is best read as a projection about a large, unevenly held stock of assets, not a promise to any one family.
For households thinking about their own position, this is one area where many people choose to take stock of a will, lifetime gifts and the tax position together. Where later-life care is a concern, it can be worth discussing options with a qualified professional; deliberately giving away assets to reduce a future care-fees contribution can be challenged by a local authority under the deprivation of assets rules, so this is about planning around the impact of care fees rather than avoiding them. Our estate planning guide explains how the pieces fit together, and if you want to see how one household compares, we look at the average inheritance separately.
Sources and methodology
Every statistic on this page is drawn from a named source and dated to its reference period. Official statistics are used as primary sources; industry reports are flagged as secondary. Figures were confirmed against each source at the time of writing in July 2026 and may be revised or superseded; tax figures are subject to change.
- ONS, Wealth and Assets Survey, Total wealth in Great Britain, April 2020 to March 2022: median household wealth, wealth composition and the top-decile threshold. ons.gov.uk
- ONS, National balance sheet estimates for the UK, 2024 edition (reference year 2023): UK total net worth. ons.gov.uk
- HMRC, Inheritance Tax liabilities statistics: commentary, tax year 2022 to 2023 (updated 31 July 2025): taxpaying estates, liabilities, effective rate, share of deaths, exemptions. gov.uk
- OBR, Inheritance tax, November 2025 outlook: forecast IHT receipts. obr.uk
- HM Government, Inheritance Tax: nil-rate band, residence nil-rate band and threshold freeze. gov.uk/inheritance-tax
- Kings Court Trust / Cebr, Passing on the Pounds (secondary source): projected intergenerational transfer of £5.5 trillion, 2017 to 2047. kctrust.co.uk
- Resolution Foundation (secondary source): distribution of inheritances and the projected doubling of inheritance value. resolutionfoundation.org
Scotland and Northern Ireland
The wealth and inheritance tax figures above are UK-wide for HMRC and OBR data, and cover Great Britain for the ONS Wealth and Assets Survey. Inheritance tax itself is a UK-wide tax, so the same thresholds apply across the nations (gov.uk, as at July 2026, subject to change). Succession law differs: Scotland has its own rules, including legal rights that can entitle a spouse and children to a fixed share, and 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.
Frequently asked questions
What is the great wealth transfer in the UK?
It is the term for the large-scale passing of accumulated assets from older to younger generations over the coming decades, mainly through inheritances and gifts. One widely cited industry projection estimates £5.5 trillion could move between generations across 2017 to 2047 (Kings Court Trust / Cebr, secondary source, subject to change). It is a projection about a trend, not a fixed amount for any family.
How much household wealth is there in the UK?
The UK's total net worth was estimated at £12.2 trillion in 2023 (ONS, National balance sheet, 2024 edition). At the household level in Great Britain, median wealth was £293,700 in April 2020 to March 2022, with property and pensions making up the largest shares (ONS, Wealth and Assets Survey).
How many estates pay inheritance tax?
In the tax year 2022 to 2023, 31,500 estates were liable to inheritance tax, equal to 4.62% of UK deaths, with total liabilities of £6.70 billion (HMRC, tax year 2022 to 2023, updated 31 July 2025). That was up 13% on the previous year. Inheritance tax remains a minority charge, though the share has been rising.
Will more people pay inheritance tax because of the wealth transfer?
Possibly, though it depends on future asset values and any policy changes. The nil-rate band (£325,000) and residence nil-rate band (up to £175,000) are frozen until the end of the 2030-31 tax year (5 April 2031), so as estate values rise more estates may exceed them (gov.uk, as at July 2026, subject to change). Nothing here is guaranteed, and outcomes vary by circumstance.
Does everyone benefit from the great wealth transfer?
No. Inheritances are unevenly spread. Research suggests fewer than one in three people (32%) expect to benefit, and recipients are concentrated among wealthier households (Resolution Foundation, February 2022, secondary source). Because transfers often arrive later in life and flow to those who already hold assets, they can widen existing gaps rather than close them. Source: resolutionfoundation.org, February 2022, secondary source, subject to change.
How can families plan for passing on wealth?
Many people choose to review a will, lifetime gifts and the tax position together, and to revisit the plan as rules and circumstances change. Available allowances, exemptions and reliefs may reduce a future inheritance tax bill depending on circumstances, but nothing is guaranteed (gov.uk, as at July 2026, subject to change). Because the stakes can be high, it can be worth discussing options with a suitably qualified professional.
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. Statistics are attributed to their named sources and reference periods; figures and rules are current as at July 2026 and are subject to change, and official statistics may be revised. 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.
