£10M-Plus Estates Drive Bulk Of Rise In Latest IHT Liability Figures

Estates worth more than £10m appear to have driven the vast majority of the latest rise in inheritance tax liabilities, according to analysis by Irwin Mitchell.

HMRC figures show that overall IHT liabilities rose by 5%, from £6.70bn in 2022/23 to £7.03bn in 2023/24, despite the number of taxpaying estates falling from 31,500 to 30,400.

Irwin Mitchell’s analysis of the data suggests £10m-plus estates accounted for around £300m of the £330m increase. In 2023/24, 220 estates in this band paid an average IHT bill of £4.72m, implying total liabilities of around £1.04bn. In 2022/23, 202 estates in the same band paid £734m in total.

This means fewer than 1% of taxpaying estates accounted for close to 15% of all IHT liabilities in 2023/24, underlining the growing concentration of the tax burden at the top end of the estate value range.

The figures relate to estates passing on death in 2023/24, rather than current-year tax receipts, due to the time it takes for estates to be reported and processed. Irwin Mitchell says they still provide an important indication of where inheritance tax pressures were heading before major reforms to Business Property Relief, Agricultural Property Relief and pensions take effect.

From April 2026, reforms to Agricultural Property Relief and Business Property Relief are due to restrict the availability of 100% relief. From April 2027, unused pension funds and death benefits are also set to be brought more clearly within the scope of IHT.

Andrea Jones, Head of Irwin Mitchell’s Private Client Advisory team, said:

“These figures may not provide a real-time picture of inheritance tax, but they give a useful indication of how liabilities were evolving before the latest reforms."

 “What stands out is the growing concentration of inheritance tax among a relatively small number of high-value estates. Estates worth more than £10m appear to have accounted for a significant share of the increase in liabilities during 2023/24.

“With further changes to business relief, agricultural relief and pensions now taking effect, many families will want to review their succession plans and understand how those reforms could affect the transfer of wealth between generations.”