Inheritance Tax by Estate Size: The Data

Inheritance tax bills rise steeply with estate size, but the effective rate paid is far below the 40% headline. In 2022 to 2023, 31,500 estates were liable and paid £6.70 billion between them, an average effective rate of 13% (HMRC Inheritance Tax liabilities statistics, 2022 to 2023, as at July 2026, subject to change).

This piece sets out what HMRC's own figures show about inheritance tax across net estate value bands: how many estates pay, how large the average bill is at each size, and why the effective rate peaks in the middle of the range rather than at the top. Every figure below is drawn from a named official source and dated at the point of use. It sits alongside our fuller Inheritance Tax Explained guide and our summary of UK IHT statistics. Figures are current as at July 2026 and subject to change.

The headline numbers

Inheritance tax remains a tax on a minority of estates. In the 2022 to 2023 tax year, 31,500 estates were taxpaying, equal to 4.62% of the 683,000 UK deaths that year, and they carried a combined liability of £6.70 billion (HMRC, 2022 to 2023, as at July 2026, subject to change). Looking ahead, the Office for Budget Responsibility forecasts inheritance tax to raise £8.7 billion in 2025 to 2026, about 0.7% of all receipts (OBR, forecast for 2025-26, as at July 2026, subject to change).

The tax-free bands explain why so few estates pay. The nil-rate band is £325,000 per person, with a residence nil-rate band of up to £175,000 where a home passes to direct descendants, so a couple can pass on up to £1,000,000 before tax. The rate above the bands is 40%, or 36% where at least 10% of the net estate passes to charity, and these thresholds are frozen to the end of the 2030-31 tax year (5 April 2031) (gov.uk, as at July 2026, subject to change).

The evidence

Key figures at a glance

Every row below is a single statistic with its source and reference period. Taken together they show a tax paid by few estates, at an average rate well under the headline, but rising with size. Each figure is drawn from HMRC or OBR official statistics and is current as at July 2026, subject to change.

Statistic	Figure	Source & period
Taxpaying estates	31,500	HMRC, 2022 to 2023
Share of UK deaths that were taxpaying	4.62%	HMRC, 2022 to 2023
Total IHT liability	£6.70 billion	HMRC, 2022 to 2023
Average effective tax rate, all estates	13%	HMRC, 2022 to 2023
Average bill, estates £300k–£400k	£13,500	HMRC, 2022 to 2023
Average bill, estates £1m–£1.5m	£153,000	HMRC, 2022 to 2023
Average bill, estates over £10m	£3.63 million	HMRC, 2022 to 2023
Highest average effective rate (£2m–£7.5m band)	24%	HMRC, 2022 to 2023
Forecast IHT receipts, 2025-26	£8.7 billion	OBR, 2025-26 forecast

Sources: HMRC Inheritance Tax liabilities statistics, tax year 2022 to 2023 and OBR inheritance tax forecast. As at July 2026, subject to change. HMRC estate counts are rounded to the nearest 10 in the source.

Average inheritance tax bill by estate size

The average bill climbs steeply as estates grow. HMRC figures for 2022 to 2023 put the average tax at £13,500 for estates valued between £300,000 and £400,000, rising to £153,000 at £1 million to £1.5 million, £322,000 at £1.5 million to £2 million, and £3.63 million for the 202 estates worth more than £10 million (HMRC, 2022 to 2023, as at July 2026, subject to change).

Net estate value band	Average IHT bill	Estates in band
£300,000 to £400,000	£13,500	2,420
£1 million to £1.5 million	£153,000	7,890
£1.5 million to £2 million	£322,000	2,780
£7.5 million to £10 million	£1.67 million	Not stated here
Over £10 million	£3.63 million	202

Source: HMRC Inheritance Tax liabilities statistics, tax year 2022 to 2023. As at July 2026, subject to change. Bands not shown are omitted rather than estimated; HMRC publishes the full breakdown in its detailed tables.

What estates hold at each size

Estate size and asset mix move together. HMRC notes that where net estate value is below £1 million, estates consist mainly of residential property and cash, while above that level they are increasingly made up of securities and other assets (HMRC, 2022 to 2023, as at July 2026, subject to change). That shift matters, because the reliefs available differ by asset type.

Because property dominates smaller taxpaying estates, the residence nil-rate band of up to £175,000 is a large part of the picture at that end of the range, and its taper away above the £2 million threshold helps explain why the effective rate climbs through the £1.5 million to £2 million band (gov.uk, as at July 2026, subject to change). Where property is the main asset, our guide to estate planning guide and the wider UK IHT statistics may add useful context.

Analysis

What the numbers mean

The data pushes back on a common assumption. Many people picture inheritance tax as a flat 40% levy, yet the average effective rate across taxpaying estates was 13% in 2022 to 2023, and even the hardest-hit band averaged 24% (HMRC, 2022 to 2023, as at July 2026, subject to change). The gap between headline and effective rate is largely the nil-rate bands and reliefs at work.

A second point is that the effective rate curve is humped rather than always rising. It appears to peak in the £2 million to £7.5 million band and then ease for the largest estates. One reading is that very large estates can hold a greater share of assets that attract business or agricultural relief, which may lower the proportion actually taxed, though the published commentary does not attribute the pattern to a single cause and individual estates vary widely.

Because the bands are frozen to the end of the 2030-31 tax year (5 April 2031) while asset values may drift upward, more estates could cross the thresholds over time (gov.uk, as at July 2026, subject to change). This is general information rather than a prediction for any one estate, and many people choose to discuss their own position with a qualified professional.

Estate size and inheritance tax across the UK

Inheritance tax is a UK-wide tax, so the £325,000 nil-rate band, the 40% rate and the estate-size figures above apply in Scotland, England, Wales and Northern Ireland alike (gov.uk, as at July 2026, subject to change). HMRC's statistics cover the whole UK. What differs by nation is the surrounding succession law: Scotland has legal rights that can give a spouse and children a fixed share of moveable estate, and uses confirmation rather than a grant of probate. Where an estate touches more than one nation, it can be worth taking advice in each.

Sources and methodology

The statistics on this page are drawn from named official sources and verified against the current published figures. Every number is reported as stated by the source, without estimation or rounding beyond what the source itself uses. HMRC rounds estate counts to the nearest 10 and tax figures as noted in its tables.

HMRC Inheritance Tax liabilities statistics, tax year 2022 to 2023. Number of taxpaying estates, total liability, share of deaths, average bill by band, effective tax rates and asset composition. gov.uk (commentary) and the wider statistics release. As at July 2026, subject to change.
OBR inheritance tax forecast. Forecast receipts for 2025-26 and the share of total receipts. obr.uk. As at July 2026, subject to change.
Nil-rate bands, rates and taper threshold. gov.uk/inheritance-tax and gov.uk nil-rate band publication. Frozen to the end of the 2030-31 tax year (5 April 2031), as at July 2026, subject to change.

Frequently asked questions

How much inheritance tax do estates actually pay on average?

Across all taxpaying estates the average effective rate was 13% in 2022 to 2023, well below the 40% headline, because the tax-free bands and reliefs shelter much of each estate (HMRC, 2022 to 2023, as at July 2026, subject to change). The average bill itself varies enormously by estate size, so any one estate can differ.

Which estate size pays the highest effective inheritance tax rate?

On HMRC figures for 2022 to 2023, estates valued between £2 million and £7.5 million had the highest average effective rate at 24%, higher than both smaller estates and those above £10 million, which averaged 17% (HMRC, 2022 to 2023, as at July 2026, subject to change). The rate curve is humped rather than always rising.

What is the average inheritance tax bill for a £1 million to £1.5 million estate?

HMRC records an average bill of £153,000 for taxpaying estates in the £1 million to £1.5 million band in 2022 to 2023, across 7,890 such estates (HMRC, 2022 to 2023, as at July 2026, subject to change). Averages hide wide variation, so an individual estate of that size may pay more or less depending on its assets and reliefs.

How many estates pay inheritance tax?

In 2022 to 2023, 31,500 estates were taxpaying, which was 4.62% of the 683,000 UK deaths that year, and they paid £6.70 billion in total (HMRC, 2022 to 2023, as at July 2026, subject to change). Most estates fall within the nil-rate bands and pay nothing.

Why is the effective rate so far below 40%?

The 40% rate applies only to value above the tax-free bands, not the whole estate. With a nil-rate band of £325,000 per person and a residence nil-rate band of up to £175,000, a large slice of most estates is tax-free, and reliefs can reduce the taxable amount further (gov.uk, as at July 2026, subject to change). That is why the measured effective rate averages far below the headline.

Do these figures apply in Scotland and Northern Ireland?

Yes. Inheritance tax is a UK-wide tax, so the bands, the 40% rate and HMRC's estate-size statistics cover the whole UK (gov.uk, as at July 2026, subject to change). Succession law differs: Scotland has legal rights over moveable estate and uses confirmation rather than probate, so the tax figures apply while the surrounding process can vary.

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 and rules are current as at July 2026 and are subject to change. 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.