Record Inheritance Tax Receipts: What It Means for Probate, Executors and Estate Planning

Recent figures from HM Revenue & Customs (HMRC) show that inheritance tax receipts have reached record levels, bringing renewed attention to inheritance tax planning, probate and the pressures faced by executors.

As more estates are drawn into the inheritance tax (IHT) net, families are increasingly finding that early estate planning and clear legal advice can make a real difference – both tax exposure and the smooth administration of an estate.

HMRC’s latest monthly bulletin confirms that inheritance tax continues to generate historically high revenues for the Treasury. Rising property values, investment growth and frozen allowances remain key factors, but they are no longer the only issues families need to consider.

Recent changes to the inheritance tax treatment of some farming and business assets, together with planned changes to pensions from April 2027, mean that probate and estate planning are now significantly more complex.

Why more estates are paying inheritance tax

Several factors have contributed to the steady increase in inheritance tax receipts:

1.      Nil-rate band freeze

The main inheritance tax allowance (the £325,000 nil-rate band) has remained frozen for a number of years and is set to stay at this level until April 2031.

2.      Residence nil-rate band fixed

While additional allowances may be available, including the residence nil-rate band in certain circumstances, these too remain fixed.

3.      Business and agricultural relief changes from April 2026

At the same time, the inheritance tax landscape has shifted in significant ways. Since April 2026, there have been major changes to the inheritance tax relief available for farming and business assets, meaning that some estates may now face tax where families would previously have expected full relief.

4.      Planned changes to unused pension funds from April 2027

Looking ahead, from April 2027, most unused pension funds and pension death benefits are due to be included in the value of an estate for inheritance tax purposes. This further change is likely to bring many more estates within scope.

The impact of these factors

Taken together, these changes mean more families are likely to encounter inheritance tax and probate issues in the years ahead, not only because of frozen thresholds but also because of changes to the reliefs available and the types of assets brought into charge.

Probate and inheritance tax: what executors need to know

Probate is the legal process through which a deceased person’s estate is administered. It allows executors to collect assets, settle debts and distribute the estate in line with the deceased’s will, or under the rules of intestacy where there is no will.

Where inheritance tax may be payable, probate and tax are closely linked. Executors are responsible for:

• Valuing the estate accurately
• Reporting to HMRC
• Ensuring tax is dealt with on time, often before probate can be granted
• Applying for probate
• Distributing assets in accordance with the will or intestacy rules

In cases where inheritance tax must be paid before the Grant of Probate is issued, this can add practical and financial pressure at an already difficult time.

If inheritance tax reporting is not dealt with properly, the estate may be exposed to:

• Interest charges and penalties
• Avoidable delay
• Increased scrutiny from HMRC in IHT returns as more estates fall within the inheritance tax regime
• Personal liability for executors in serious cases

These changes are particularly important where an estate includes agricultural assets, business interests or substantial pension provision. Executors and personal representatives may now need to investigate more complex relief claims and obtain more detailed valuations.

Common inheritance tax and probate challenges for executors

The rise in taxable estates has led to the increased pressure placed on executors, who are often family members acting for the first time. Common difficulties include:

• Delays caused by HMRC queries or asset valuation issues
• The need to raise funds to pay inheritance tax before assets can be accessed
• Complex valuation requirements for property, business or agricultural assets
• Uncertainty around reliefs, particularly following 2026 IHT rule changes
• Administrative complexity and strict reporting requirements
• Emotional strain at an already difficult time

Without clear planning and professional guidance, these issues can slow the administration of an estate and place unnecessary stress on families.

Why inheritance tax planning and estate planning matter now more than ever

Record inheritance tax receipts underline the importance of reviewing estate planning during your lifetime. Taking advice early can help individuals understand the likely value of their estate and identify steps that may reduce tax exposure or make probate easier for those left behind.

This should include:

• Keeping wills up to date.
• Maintaining clear records of gifts.
• Reviewing the ownership of key assets.
• Taking advice on any business, agricultural or pension assets which may now require closer inheritance tax planning.

As a general guide, it is sensible to review your will every three to five years, and sooner if your circumstances change.

Many people treat a will as something to be done once and then forgotten, only to find years later that it no longer reflects their wishes or current position.

Regular reviews help ensure your will remains up to date, gives you peace of mind and can make matters much easier for those you leave behind.

Forward planning can also give executors greater clarity and reduce the risk of disputes after death.

Practical steps for executors and individuals

If inheritance tax may affect your estate, or if you are acting as an executor, these practical steps can help:

1. Review your will regularly to make sure it still reflects your wishes and current circumstances.
2. Keep clear records of significant gifts and major assets.
3. Consider how key assets are owned, particularly property, business interests (with attention paid to new Business Property Relief rules) and pension arrangements.
4. Make sure your executors know where important documents and information are kept.
5. Leave a clear record of important digital assets, together with secure details of where access information is stored and how it can be retrieved after death.
6. Take advice early, particularly if you think your estate may exceed the available inheritance tax thresholds, or if it includes business, agricultural or pension assets and you are unsure how the current rules apply.

A timely review can reduce future complications and help executors manage the probate process more confidently.

How Napthens can help with inheritance tax, probate and estate planning

At Napthens, we support individuals, families and executors at every stage of the probate process. We provide clear, practical advice tailored to each client’s circumstances, whether that involves planning ahead, dealing with inheritance tax reporting or managing the administration of an estate after a bereavement.

We can assist with:

• Probate applications and estate administration
• Advising executors on their duties and responsibilities
• Inheritance tax reporting and HMRC correspondence
• Estate planning to help prepare for the future

We understand that inheritance tax and probate issues often arise at an already difficult and emotional time. Our private client team combines technical expertise with clear, practical advice, helping individuals, families and executors protect wealth, manage risk, plan effectively for the future and manage estates with greater certainty. Whether you are reviewing your own affairs or dealing with the administration of an estate, we are here to make the process clearer, ease the burden on those involved and help you make informed decisions for the future. Visit our wills, trust and probate page for more details, or contact us today to get started.