Overview

• Treasury is examining inheritance tax reforms, including curbing tax-free gifts made within seven years of death and imposing a lifetime cap, as ministers look to close an estimated £20bn–50bn fiscal gap.
• Economists note inheritance tax currently raises around £7–8bn annually and warn that proposed tweaks would likely yield only an additional £2–4bn, leaving most of the shortfall unaddressed.
• Experts caution that tighter gifting rules could prompt accelerated transfers, greater use of trusts or wealthy individuals relocating, complicating revenue projections.
• Senior Conservatives and Reform UK leaders argue that inheritance tax hikes would punish families, deter investment and risk driving high-net-worth residents overseas, signalling fierce political opposition.
• Analysts expect any inheritance tax measures to be bundled with other revenue-raising steps such as sin tax hikes, duty increases and further freezes on income-tax thresholds.