How the value of your estate affects a key Inheritance Tax allowance

Inheritance Tax (IHT) is a growing concern for many people in the UK, with increasing numbers of estates facing a rising tax liability.

Each year, the amount of IHT paid to HMRC is increasing. By 2030/31, the Office for Budget Responsibility (February 2026) forecasts that IHT receipts will reach £14.5 billion, up from £8.3 billion in 2024/25.

Frozen tax-efficient allowances are a key driver behind this trend. As your estate grows, a larger portion could exceed the threshold and become subject to IHT.

What’s more, once your estate reaches £2 million, your tax-efficient allowance can start to reduce, exposing more of your wealth to IHT.