Inheritance‑tax receipts reached £1.5 billion in April and May, the first two months of the 2025‑26 tax year, HM Revenue & Customs revealed on Thursday.
The figure is £98 million higher than in the same period last year and keeps the levy on its long‑running upward trajectory.
Yet the latest surge comes just as ministers weigh a rethink of one of their most controversial reforms: extending inheritance tax to the worldwide estates of non‑domiciled residents. The measure, announced earlier this year and expected to raise about £430 million annually, is now under review amid reports of an exodus of wealthy non‑doms.
“If rumours are correct, the Chancellor is contemplating a U‑turn,” said Nicholas Hyett, investment manager at Wealth Club. “Not only would that reduce the extra revenue HMRC was banking on, it also highlights the broader economic cost of driving affluent international residents away—lost spending, investment and philanthropy.”
Hyett argued that imposing the UK’s 40 per cent inheritance‑tax charge on global assets was always the easiest change for the super‑rich to sidestep: “City high‑flyers need to be in London; the mega‑wealthy can live anywhere. The UK is attractive, but not attractive enough to surrender 40 per cent of the family fortune.”
Advisers to non‑doms report that as many as 30 per cent of clients are actively relocating or considering relocation to more favourable tax regimes. Even if the Treasury rows back, Hyett warned, “the horse has bolted—plans are made and confidence in Britain’s stability has been dented.”
The debate has been inflamed by fresh speculation that ministers might scrap inheritance‑tax relief on shares listed on London’s junior AIM market, just months after relief was cut in half. “That would be terrible news for AIM,” Hyett said. “The constant tinkering creates exactly the kind of uncertainty that deters long‑term investment in smaller UK companies.”
With receipts climbing but high‑net‑worth taxpayers heading for the exit, the government faces a dilemma: press ahead with reforms in pursuit of extra revenue, or recalibrate to keep globally mobile wealth—and the broader economic benefits it brings—on British soil.
