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Inheritance tax hits more homeowners

The value of homes has increased in the last year or so and the nil rate bands have been frozen up to 2026

Dealing with someone’s affairs when they have died

In tax receipt data published by HMRC in June, the amount received by the Government in Inheritance Tax has increased by £100 million over the same time last year.

It’s probable that this is because the value of homes has increased in the last year or so and the nil rate bands, below which people don’t pay inheritance tax, have been frozen up to 2026.

During the pandemic, because of the Stamp Duty holidays and the fact that many people were changing their lifestyles and looking for bigger homes to work from, property prices went up in most areas. It remains to be seen whether interest rate rises will damp down the property market, but it has been vibrant, which means that most people who own a house will have seen the value of their estate rising, even if they have no intention of selling their house.

This comes at a time when the Inheritance Tax free thresholds have been frozen, which naturally brings more estates into tax.

In the last decade, the Government’s receipt of inheritance tax has more than doubled from under £3 billion to over £6 billion.

Inheritance tax is paid on someone’s estate when they die. It is not paid by the majority of estates because nil rate bands and exemptions mean a deceased person would have had to own quite a few hundred thousand pounds in assets before the tax becomes payable. However, the increase in house prices, means that more estates are being drawn in and even people with quite modest houses, as opposed to mansions, may find that their families are paying inheritance tax when they pass away due to the value of the house.

It is sometimes said that Inheritance Tax is an “optional” tax because it is possible to legitimately order your affairs and plan before you die to reduce or remove the need to pay it by taking advantage of the various reliefs and nil rates. However, that requires thought and careful planning. Solicitors specialising in probate and wealth matters can often help with this. If you have assets, which include your house and run into the hundreds of thousands of pounds, then it is worth thinking about what the impact of inheritance tax may be on your family and other beneficiaries. If you are in that position then it is sensible to take some advice from a solicitor specialising in Wills, Probate and Estate planning.

If you need to find a regulated solicitor who specialises in Probate and Estate administration, you can search for free and without having to provide any of your personal details at You may also be interested in looking at our other free guidance covering many other legal topics.