Inheritance tax
Who actually pays inheritance tax? What HMRC's latest figures show
Fewer than 1 in 20 deaths leads to a bill. But the estates that pay have a lot in common. Most of the tax lands on the second death.
Imran Ashraf · Estate planning specialist
The figures in brief
HMRC's latest statistics cover deaths in the 2023 to 2024 tax year. Of 644,000 deaths in the UK, 30,400 led to an inheritance tax bill. That's 4.72%, the highest share since 2006 to 2007.
- Deaths with a bill
- 4.72%
- Taxpaying estates
- 30,400
- Total tax
- £7.03bn
- Average bill
- £231k
UK deaths in the 2023 to 2024 tax year. Source: HMRC.
Those estates paid £7.03bn between them. The average bill was £231k, although the average hides a very wide range. Estates worth £300k to £400k that paid any tax paid about £13,800 on average. Estates over £10m paid about £4.72m each. Across all taxpaying estates the average effective rate was 13%, far below the headline 40%, because allowances, exemptions and reliefs take a large share out of the calculation.
The number of taxpaying estates actually fell slightly, from 31,500 the year before. The share of deaths rose because there were fewer deaths overall. Total tax still went up by about 5%, because the estates that did pay were larger.
Most of the tax lands on the second death
The single most striking figure is how little married people pay. When someone dies married or in a civil partnership, their estate accounted for just £450m of the tax, about 6% of the total.
Tax by marital status of the person who died
The reason is the spouse exemption. Whatever you leave a husband, wife or civil partner is normally free of inheritance tax, so the first death in a couple rarely produces a bill. The tax arrives when the survivor dies and the estate passes to the next generation.
That's why widowed people account for 59% of all inheritance tax. It's the same money, a few years later, with no spouse left to inherit it.
Married couples pay almost none of it. Widows and widowers pay most of it. That's the second death showing up in the national figures.
For families, the lesson is to plan for the second death rather than the first. A couple who look at their position today and see no tax because everything goes to each other are looking at the wrong death.
Age matters too
More than half of all inheritance tax comes from estates of people who died at 85 or over. Another 27% comes from those who died between 75 and 84.
Tax by age at death
Part of this is simply that most deaths happen at older ages. Part of it is that wealth tends to build up over a lifetime, particularly in property. Older estates are more likely to be second estates. For anyone in their 70s, this is the decade when planning still has time to work. Gifts need 7 years to fall out of an estate fully.
Single people and the missing exemption
The middle bar is easy to overlook. Estates of people who were single, divorced or whose civil partnership had been dissolved paid £2.46bn, about 35% of the tax.
These estates have no spouse exemption and no unused allowance from a partner. That group includes unmarried couples, who are treated as single for inheritance tax however long they've lived together. For them, even a modest estate can produce a bill on the first death.
What's likely to change
The nil rate band has been £325k since 2009 and is now frozen until April 2031. As house prices and savings rise, more estates cross the line each year. HMRC's own forecasts still expect more than 90% of estates to have no liability over the next few years, but the share that pays is drifting upwards.
From 6 April 2027, most unused pension funds will also count towards the estate. That will bring some estates into tax for the first time and increase the bill for others. The first statistics to show the effect won't be published until around 2029.
How to read your own position
National averages don't tell you much about one family. What they do show is where the risk concentrates: the second death, estates without a spouse and older estates where the home has grown in value.
If your estate fits one of those patterns, I'd look at your own figures rather than the averages.
Questions
Why are so few estates taxed if the allowances are frozen?
Most estates are still below the allowances, especially when a home goes to children or everything passes to a spouse. The frozen thresholds mean the share that pays is rising slowly, not suddenly.
How up to date are these figures?
HMRC publishes them about 2 years after the deaths they cover, because estates take time to settle. The figures here cover deaths in the 2023 to 2024 tax year.
Where does your estate sit?
The IHT Diagnostic takes a few minutes and shows whether your estate is likely to be one that pays.
Check your positionSources
Figures from HMRC statistics for the 2023 to 2024 tax year. General information, not personal advice.