Eye-popping increases in government’s property tax grab

Some jaw-dropping Treasury figures released over the weekend show the reliance of government on property taxes.

Inheritance tax (IHT) receipts reached £7.1 billion in the first 10 months of the 2025/26 tax year.

That is £100m higher than the same period last year and continues a long-term upward trend in death tax takings.

The independent Office for Budget Responsibility forecasts that IHT will raise £9.1 billion in the current tax year.

Meanwhile separate HM Revenue & Customs data shows that Capital Gains Tax (CGT) receipts for January 2026 were £16.985 billion – an amazing seven billion more than the same month a year earlier.

Total CGT receipts for the year February 2025 to January 2026 inclusive were £20.6 billion, up from £14.3 billion in the previous 12-month period – a rise of 44%.

And of course stamp duty showed an increase too.

Homebuyers paid £899m in SDLT in January 2026 – up 6% from the £848m paid in January last year.

January is typically a quieter month for home purchases, but not this year.

Analysts’ views

Financial advisors say more families are being drawn into the IHT net as a result of frozen thresholds, rising asset values and policy changes that will widen the application of the tax in coming years.

Isaac Stell, Investment Manager at Wealth Club, says: “The government has made a pig’s ear of inheritance tax reform. 

“Crackdowns on farmers and business owners proved unpopular and ultimately unworkable, forcing a partial retreat on relief thresholds. 

“But years of frozen allowances, combined with new rules that will bring pensions into the scope of IHT, mean more ordinary families, not just the wealthy, are being pulled into the tax net.

”At the same time, HMRC’s tougher enforcement is adding further pressure at what is already a difficult time for bereaved families. 

“With the tax base widening and sharp ‘cliff edges’ in the relief system still in place, proactive planning and accurate reporting have never been more important.”

And on CGT, Jason Hollands – managing director at wealth management firm Evelyn Partners – comments: ‘That is a big upswing in the CGT take for January 2026, which at nearly £17 billion is 69% higher than [a year earlier].

 “January 2026’s figure includes the payment of self-assessment bills for the 2024/25 tax year so it could reflect investors – from April 2024 – disposing of assets ahead of an expected rise in CGT rates that duly arrived at the October 2024 Budget.

“Don’t forget that many thought CGT rates were going up more than they did, with some Labour MPs arguing for an equalisation with income tax rates, so a summer of ’24 firesale of assets could be behind this spike.”

Hollands says that as the annual exemption had been slashed by the previous government – to just £3,000 by April 2024 – there is now little protection against CGT for investors selling assets.

Kindly shared by EstateAgentTODAY Image courtesy of Adobe