Estates worth more than £10m appear to have accounted for the vast majority of the latest increase in inheritance tax (IHT) liabilities, showing the growing concentration of the tax burden among the wealthiest estates, according to analysis by Irwin Mitchell.

HMRC data showed total IHT liabilities increased by 5% from £6.70bn in 2022/23 to £7.03bn in 2023/24, despite the number of estates paying the tax falling from 31,500 to 30,400.

Irwin Mitchell’s analysis suggested estates valued at more than £10m accounted for around £300m of the £330m overall increase.

There were 220 estates in the £10m-plus category in 2023/24, each paying an average IHT bill of £4.72m. This implies total liabilities of about £1.04bn, compared with £734m from 202 estates in the same category a year earlier.

As a result, fewer than 1% of taxpaying estates generated close to 15% of all IHT liabilities in 2023/24.

The figures relate to estates passing on death during 2023/24 rather than IHT receipts collected during the current tax year, reflecting the time required for estates to be reported and processed.

The law firm said the data nevertheless provided an important indication of how IHT liabilities were developing before a series of significant reforms take effect.

From April 2026, changes to Agricultural Property Relief and Business Property Relief are set to restrict the availability of 100% relief. From April 2027, unused pension funds and death benefits are also due to come more clearly within the scope of IHT, potentially increasing liabilities for some families.

Andrea Jones, head of Irwin Mitchell’s Private Client Advisory team, said the figures provided a useful indication of how liabilities were evolving before the latest reforms.

She concluded: “What stands out is the growing concentration of IHT among a relatively small number of high-value estates. With further changes to business relief, agricultural relief and pensions now taking effect, many families will want to review their succession plans and understand how those reforms could affect the transfer of wealth between generations."

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