Inheritance Tax as a Share of UK Tax Receipts

Inheritance tax raised about £8.7 billion in 2025-26, which the Office for Budget Responsibility puts at roughly 0.7% of all UK tax receipts and around 0.3% of national income (OBR, 2025-26 forecast, updated 9 February 2026).

That places it well below the large revenue raisers such as income tax, National Insurance and VAT. Against total HMRC receipts of £938.8 billion in 2025-26, inheritance tax is a modest line item (HMRC annual receipts bulletin, 2025-26, published 19 June 2026). This page sets out the numbers and what they do, and do not, tell you. Core thresholds are current as at July 2026 and subject to change.

Key figures at a glance

On the OBR's 2025-26 basis, inheritance tax was worth roughly 0.7% of all UK tax receipts and about 0.3% of national income, equivalent to around £300 per household (OBR, 2025-26 forecast, updated 9 February 2026). The table below gathers the headline statistics, each with its source and reference period.

Note: the OBR forecast figure (~£8.7bn) and the HMRC cash-receipts figure (£8.5bn) for 2025-26 differ because they are produced on different bases and at different points in the year. Both are official statistics. Figures can be revised.

What the numbers mean

At roughly 0.7% of all UK tax receipts in 2025-26, inheritance tax raises far less than the taxes most people notice day to day, yet it attracts attention out of proportion to its size (OBR, 2025-26 forecast, updated 9 February 2026). A few points help put the share in context.

First, a small share of receipts does not mean a small effect on the households involved. The tax is concentrated: in 2022-23 only 4.62% of deaths led to a charge, but those 31,500 estates carried a combined liability of £6.70 billion (HMRC IHT liabilities statistics, updated 31 July 2025). So the burden falls narrowly rather than broadly, which is part of why individual bills can be large even where the national total looks modest.

Second, the headline 40% rate overstates what most taxpaying estates actually pay. Source: gov.uk, as at July 2026, subject to change. HMRC's data shows an average effective rate of around 13% across taxpaying estates in 2022-23, because allowances, exemptions and reliefs reduce the taxable amount before the rate applies (HMRC IHT liabilities statistics, updated 31 July 2025). The gap between the marginal rate and the effective rate is one reason planning around the reliefs can matter so much.

Third, the direction of travel. Receipts have edged up as a share of national income, from 0.2% in 2006-07 to 0.3% in 2025-26, while the nil-rate band of £325,000 and residence nil-rate band of up to £175,000 are frozen until the end of the 2030-31 tax year (HMRC receipts bulletin, 19 June 2026; thresholds per gov.uk/inheritance-tax, as at July 2026, subject to change). In our reading, frozen thresholds against rising property and asset values tend to pull more estates over the line over time, which may lift both the reach and the share, though the actual path depends on future policy and markets and cannot be assumed.

A tax can be small in the national accounts and still significant for the families it touches. The share of receipts and the size of an individual bill are two different questions.

Who actually pays inheritance tax

Inheritance tax reaches a minority of estates. In 2022-23, 4.62% of UK deaths resulted in an IHT charge, which HMRC describes as fewer than one in twenty, covering 31,500 estates out of 683,000 deaths (HMRC IHT liabilities statistics, updated 31 July 2025). Most estates fall within the available tax-free thresholds and pay nothing.

The reasons an estate stays below the line are the mainstream ones built into the rules. Each person has a nil-rate band of £325,000, and a residence nil-rate band of up to £175,000 can apply where a home passes to direct descendants (gov.uk/inheritance-tax, as at July 2026, subject to change). Transfers between spouses and civil partners are generally exempt, and unused bands can transfer to the survivor, so a married couple may be able to pass on up to £1,000,000 in the right circumstances (gov.uk, nil-rate bands, as at July 2026, subject to change). Whether any of this applies to a given estate depends on its make-up, so many people choose to discuss the detail with a qualified professional. Our wider Inheritance Tax Explained guide covers how the bands and reliefs fit together, and the IHT receipts page tracks the money the tax brings in.

Sources and methodology

Every figure on this page comes from a named official source. Share-of-receipts and per-household figures are OBR forecasts; cash-receipts totals are HMRC outturn statistics; and the reach across estates comes from HMRC's Inheritance Tax liabilities statistics, which report a different, later period (2022-23) than the receipts data (2025-26). The two are not directly comparable, which is why they are shown separately.

• Office for Budget Responsibility, inheritance tax. Share of receipts (~0.7%), share of national income (~0.3%), per-household figure (~£300) and forecast receipts (~£8.7bn), 2025-26. obr.uk (updated 9 February 2026).
• HMRC tax receipts and NICs, annual bulletin. Total HMRC receipts (£938.8bn) and IHT cash receipts (£8.5bn) for 2025-26, and the GDP-share trend (0.2% in 2006-07 to 0.3% in 2025-26). gov.uk (published 19 June 2026).
• HMRC Inheritance Tax liabilities statistics. Share of deaths charged (4.62%), estate and death counts (31,500 of 683,000), total liability (£6.70bn), average effective rate (~13%) and the 2006-07 peak (5.96%), all for 2022-23. gov.uk (updated 31 July 2025).
• Core thresholds and rates. Nil-rate band (£325,000), residence nil-rate band (up to £175,000), 40% standard rate, and the freeze to the end of 2030-31. gov.uk/inheritance-tax, as at July 2026, subject to change.

This is general information about published data, not a calculation for any particular estate. For the pieces of a plan and where they fit, see our estate planning guide.

Frequently asked questions