Insights

Inheritance tax update: March 2026 and first quarter

Author

Laura Hayward

Published 23 Apr 2026

Read Time 2 mins

As the April deadlines for agricultural property relief and business property relief pass, IHT receipts rise again.

The topline

Inheritance tax (IHT) receipts for March 2026 were £775 million, up from £614m in February and from £671m last March
It brings IHT receipts for the first quarter to £1.91bn, similar to the £1.92 in Q1 2025
Inheritance tax receipts from April 2025 to March 2026 are £8.5 billion, up £0.2 billion from the same period last year

The IHT overview

IHT receipts remain on track for a record year, notwithstanding lower receipts in January (£537m compared with £639m in 2025). Receipts in February were broadly similar to last year (£614m against £612m), while receipts in March are up 13% on the same month in 2025.

As the ONS notes, higher volumes of wealth transfers as the baby boomer generation dies, rises in asset values, and the freezing of IHT thresholds at their 2020 to 2021 levels (up to and including 2030 to 2031) are all pushing up receipts.

IHT receipts for the 12 months to the end of March 2026 of £8.5bn are a little under 1% (0.9%) of total HMRC tax and national insurance receipts for the period. This reflects a significant increase in the total tax take: £938.8 billion, which is £80.2 billion higher than the same period last year.

S&W’s expert view

The March figures for IHT are the last snapshot we’ll have from before the April deadline for using trusts to secure agricultural property relief (APR) and business property relief (BPR). After this point, the rules have become materially more restrictive for larger estates.

The doubling of the lifetime threshold to £2.5m for full relief didn’t change that. Before April, shares and other qualifying assets could be placed into trust with no cap on business property relief. From April, full relief is only available where the value of qualifying business or agricultural assets falls within the £2.5m lifetime limit (or £5m for a couple).

Even though that deadline has passed, there’s still plenty to consider for those who haven’t already recently reviewed their arrangements.

For a start, there will still be a role for trusts for some estates. Assets or shares settled into trust worth over the threshold still benefit from 50% APR or BPR relief.

In effect, that means a 10% lifetime charge: an immediate IHT bill payable on the transfer into trust (although it can be paid in ten equal, interest-free annual instalments). It’s worth remembering that all trusts also have a 6% charge every ten-year anniversary on the value of assets held. Where assets qualify for APR/BPR relief, the charge is halved to 3%.

These can be significant charges, but the alternative is to bear 20% IHT on qualifying assets on death.

Regardless of whether a trust is the right tool for any individual, with values rising, thresholds frozen and pension funds to be included in estates from April 2027, the importance of estate planning is only going to grow. And IHT receipts are likely to trend only one way, too.