David Alexander

Scotland’s largest lettings and estate agency said the latest statistics show that £7.13 billion was collected between April 2025 and January 2026, with £9.1 billion forecast for the full financial year – £1.3bn higher than the same period the previous year.

There were 31,500 estates affected, which represents 4.62% of all estates and this number was up 13% on the previous year.

The £325,000 nil-rate band has been frozen since 2009 but, if it had risen with inflation, it would now stand at £523,419.

The Office for Budget Responsibility (OBR) is forecasting IHT revenue of £9.1bn for the 2025/26 year, £900m higher than the record amount collected in the previous year.

The OBR believes that by 2030/31 the amount collected will have doubled to £14.5bn and will affect 10% of all estates.

With pensions being included in assessments from April 2027 – which in itself is expected to bring 50,000 estates into the tax – and the IHT caps for agricultural and business property reliefs coming in this April, the opportunities for the government to collect more tax from estates has grown considerably.

David Alexander, chief executive of DJ Alexander Ltd, said: “With the Chancellor’s Spring forecast due on 3rd March – which the government is downplaying to avoid spooking the markets as they did with last year’s Budget – an opportunity has arisen to soften the impact of these changes to inheritance.

“The Chancellor now has a £30.4bn budget surplus and, if she wishes to encourage enterprise, saving, thrift and investment then she could do worse than use some of her recent unexpected tax windfall to reduce the burden of taxation on those who have accumulated money throughout their lifetime.

“This enormously unpopular tax targets ordinary people who have worked hard, saved, built up a pension, and paid off their mortgage. These are people who are doing everything that the system is telling them to do and yet they are now to be penalised for doing the right thing.”

He concluded: “It can’t be right and just that this specific group – who have saved, bought a home, and paid into a pension – should be seen as an easy target for increased taxation.

“This is counter-intuitive in any society where the encouragement of thrift, effort, saving, and work is being punished rather than rewarded and these individuals were simply hoping that their lifelong efforts would result in them being able to provide a nest egg for their families.”