A major inheritance tax change is set to come into force next year, potentially pulling thousands more families into the tax net.
The move comes as HMRC continues to rake in near-record sums from the levy.
Inheritance tax receipts reached £730million in May 2026, up from £701million a year earlier, as more estates became liable for the charge.
The latest figures come after the Treasury recorded a fifth consecutive record-breaking year for inheritance tax receipts, with collections reaching £8.5billion during 2025-26.
While monthly figures can fluctuate, experts say the long-term trend remains clear.
Shaun Moore, tax and financial planning expert at Quilter, said: “While monthly figures can fluctuate, the broader direction remains clear, with more estates being drawn into scope as thresholds remain frozen and asset values persist.”
Despite the rise in May, combined inheritance tax receipts for April and May 2026 totalled £1.4billion, £37million lower than during the same period last year.
However, experts warn a major change due to take effect in April 2027 could significantly increase the number of families facing inheritance tax bills.
From next year, unused defined contribution pension pots will be included in estate valuations for inheritance tax purposes.
The change is expected to bring an additional 10,500 estates into the scope of inheritance tax in its first year alone, affecting families who may previously have had no liability.
HMRC rakes in an extra £730million
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GETTYMr Moore said: “We are also now firmly in the final year where pension wealth remains outside the scope of Inheritance Tax, with unused pension pots due to be brought within the taxable estate from April 2027.
“That will significantly increase the number of families facing a liability.”
Nick Henshaw, Head of Intermediaries Distribution at Wesleyan, said: “With less than a year to go until pensions are liable for inheritance tax, many advisers are doing what they can to support clients in planning ahead.
“But detailed guidance is still lacking from HMRC at this point, leaving a lot of guesswork and making giving clear advice a challenge.”
Sarah Coles, head of personal finance at AJ Bell, warned that many families remain unaware of the rules and allowances available to reduce their inheritance tax bill.
Families warned inheritance tax bills could jump by £34,000 under pension crackdown | GETTY
She said: “Inheritance tax is positively Byzantine in its complexity, so while most people have got to grips with some of the basics, there will be a myriad of rules they have no idea at all about.”
Married couples and civil partners can pass assets to one another free of inheritance tax. Individuals can also benefit from a £325,000 nil-rate band, while a further £175,000 residence nil-rate band may apply when a main home is left to direct descendants.
Together, these allowances can allow couples to pass on up to £1million before inheritance tax becomes payable.
Families can also make use of annual gifting allowances worth £3,000, while larger gifts may fall outside the estate entirely if the donor survives for seven years.
Charitable donations are exempt from inheritance tax, while leaving at least 10 per cent of an estate to charity reduces the inheritance tax rate from 40 per cent to 36 per cent.
Ms Coles also highlighted that qualifying AIM shares held for at least two years can attract business property relief, reducing the effective inheritance tax rate to 20 per cent.
However, she warned these investments carry higher levels of risk and should only form a small part of a diversified portfolio.
Life insurance policies written in trust can provide another way of helping beneficiaries meet any inheritance tax liability, as payouts are usually made outside the estate and do not have to wait for probate.