Accredited official statistics

Inheritance Tax liabilities statistics: background quality report

Published 31 July 2024

1. Contact

• Organisation unit - Knowledge, Analysis and Intelligence (KAI)

• Name - J Mee

• Function – Inheritance Tax Analysis, Personal Taxes

• Mail address – 3C/06, 100 Parliament Street, London, SW1A 2BQ

• Email - [email protected]

2. About HMRC’s Inheritance Tax liabilities statistics

HMRC’s Inheritance Tax liabilities statistics contains statistics on Inheritance Tax (IHT) and estates passing on death for which grants of representation are required where IHT forms were completed. They include information on the numbers of estates that pay IHT, their size and location and the assets contained in those estates. Information is also provided about certain IHT trust charges.

These statistics include information based on IHT returns, and more information on this can be found in the published commentary.

The Inheritance Tax liabilities statistics were independently reviewed by the Office for Statistics Regulation in September 2021. They comply with the standards of trustworthiness, quality and value in the Code of Practice for Statistics and should be labelled ‘accredited official statistics’. Accredited official statistics are called National Statistics in the Statistics and Registration Service Act 2007.

Our statistical practice is regulated by the Office for Statistics Regulation (OSR). OSR sets the standards of trustworthiness, quality and value in the Code of Practice for Statistics that all producers of official statistics should adhere to. You are welcome to contact us directly with any comments about how we meet these standards by emailing [email protected]. Alternatively, you can contact OSR by emailing [email protected] or via the OSR website.

3. Statistical presentation

3.1 Data description

This publication provides statistics on Inheritance Tax (IHT) liabilities in the UK.

The statistics cover estates passing on death notified to HMRC as obtaining a grant of representation (otherwise known as ‘probate’, or ‘confirmation’ in Scotland) from one of the three UK Courts Services. These are:

• HM Courts & Tribunals Service (HMCTS) for England and Wales.

• Scottish Courts & Tribunals Service (SCTS) for Scotland.

• Northern Ireland Courts & Tribunals Service (NICTS) for Northern Ireland.

Following a reporting requirement change from 1 January 2022, non-taxpaying estates which are classed as ‘excepted’ are no longer required to report their valuations to HMRC via IHT forms or notify HMRC that they have obtained a grant of representation. As such, their details are no longer included in these statistics, which now have reduced coverage. For more information, please the policy paper announcing the changes.

The statistics also cover the number of IHT charges faced by taxpaying trusts: either the entry, ten year anniversary, or exit (proportionate) charge. These charges arise whenever a chargeable event occurs.

These statistics are based largely on information submitted in IHT returns and include analysis of the numbers of estates or trusts that pay IHT, their size and location and the assets contained in those estates or trusts.

The statistics are published for previous tax years. Forecasts of future IHT receipts are produced and published by the Office for Budget Responsibility (OBR). More information on how the OBR generate their forecasts is available on their tax-by-tax webpage.

3.2 Classification system

Published breakdowns of the number of estates or trust charges and the values of those estates’ or trusts’ assets (including relevant lifetime gifts), debts, exemptions, reliefs, allowances and tax liabilities are based on data submitted by estates or trusts on their IHT returns. A unique taxpayer reference number, assigned to each registered estate or trust, is used to aggregate the liabilities data.

3.3 Coverage

Inheritance Tax is a direct tax charged on the taxable value of wealth transferred from the estates of deceased individuals. In some instances, it is also charged on trusts. 

4. Statistical concepts and definitions

Inheritance Tax

Inheritance Tax (IHT) was introduced in 1986. It replaced Capital Transfer Tax which had been in force since 1975 as a successor to Estate Duty.

IHT is a wealth transfer tax – it is a tax on the value of the estate (the property, money and possessions) of someone who has died once it has been transferred. There is normally no IHT to pay if either the value of the estate is below the £325,000 tax-free threshold (known as the ‘Nil-Rate Band’, or NRB) or the deceased leaves everything to their spouse or civil partner, a charity or other relevant organisations. If the deceased was pre-deceased by a spouse or civil partner or left UK residential property to a direct descendent (for instance, a child), the estate may be entitled to further tax-free thresholds.

Please see the ‘thresholds’ section below for more details. 

IHT is levied on:

• The assets (less outstanding deductible debts) of deceased persons transferred on death;

• Gifts made within 7 years of death or made at any time when there is a reservation of benefit which continues within 7 years of death (such transfers become chargeable at the time of death);

• Gifts by individuals to certain types of trusts (such transfers are chargeable at the time the gift is made);

• The value of assets contained within certain types of trusts on the ten year anniversary of their creation; and

• The value of assets removed from certain types of trusts since the last ten year anniversary charge.

Assets are valued at the open market price at the time of the transfer.

Inheritance Tax receipts

The amount of IHT collected by HMRC from estates and trusts during a given financial year, regardless of when the tax liability was created. This publication no longer contains statistics on IHT receipts. These can be found in the HMRC bulletins on tax receipts for the UK.

These bulletins report the cash receipts received by HMRC in a given month or year. In some limited circumstances, IHT can be paid by transferring assets under the ‘acceptance in lieu’ scheme. Receipts under this scheme are reported by the Office for National Statistics.

Inheritance Tax liabilities

The amount of IHT that estates or trusts must pay to HMRC, regardless of when they actually do. IHT liabilities accrue in the tax year in which the chargeable wealth transfer took place. For estates, this is the tax year in which the deceased passed away and transferred wealth. For trusts, this is the tax year in which the chargeable event occurred. Tax liabilities are different to tax receipts, as estates are given up to six months following the end of the month in which the deceased passed away to start paying their IHT bill. As such, there is a long time lag between when the tax charge is created and when it is paid to HMRC.

Financial year

A financial year lasts from 1st April until 31st March the following calendar year.

Tax year

Tax liability statistics are aggregated into tax years. A tax year lasts from 6th April until 5th April the following calendar year.

Number of estates

The number of estates who have registered with HMRC and are required to submit either an IHT400 or IHT205 Inheritance Tax return (C5 form in Scotland), in a given tax year.  Some tables in the publication only include estates which have a positive IHT liability and are taxpaying.

Trust

A trust is a legal arrangement which involves someone (the ‘settlor’) transferring their assets to one or more individuals or companies, or a combination of these (the ‘trustee’), who is made legally responsible for the assets. The trustee holds these assets for the benefit of one or more persons (the ‘beneficiaries’) identified individually or collectively by the settlor.

Number of trusts

The number of trusts who have registered with HMRC and are required to submit an IHT100 Tax Return form.

Tax rates

A 40% headline (marginal) tax rate is charged on the net value of the deceased’s estate once any outstanding debts, exemptions, reliefs, and tax-free allowances have been deducted. Since 2012, a reduced 36% marginal tax rate is charged if the deceased left at least 10% of the value of their estate to a qualifying charity.

Given the number of exemptions, reliefs, and tax-free allowances available to estates, the average effective tax rate (AETR) faced by a taxpaying estate is lower than the headline (marginal) rate. A taxpaying estate’s AETR is defined as the percentage of net wealth transferred at death that they pay in IHT.

It is often more useful to examine the AETR when discussing analysis of the IHT system. Table 12.1 shows the AETR faced by taxpaying estates by the size of the net estate, broken into bands. It is calculated by dividing the tax due per estate by the net value of the estate at the individual estate level. A simple (mean) average is then taken within each given net estate band. Therefore, caution must be taken when comparing AETRs across different bands in the wealth distribution, since the number of taxpaying estates within each net estate band often varies.

The length of net estate bands chosen was done so to maximise transparency and the usefulness of these statistics to users, while also upholding HMRC’s commitment to protect taxpayer confidentiality. These bands will be kept under review each year.

Note that the way AETRs have been calculated is slightly different to those included in a previous report published by the Office for Tax Simplification on inheritance tax using the same data for the 2015 to 2016 tax year. In that report, the value of tax liabilities and total net estates within each band were aggregated regardless of taxpaying status, before an AETR was calculated for each band. In this publication, the AETRs have been calculated at the individual estate level for only taxpaying estates, before an average (mean) has been taken within each band. This will result in slightly different AETR levels. 

Tax rates for trusts are different. Please see the guidance on trusts and Inheritance Tax for more information on trust charges.

IHT Thresholds and Nil-Rate Bands

Each estate benefits from a tax-free allowance called the Nil-Rate Band (NRB). The NRB is currently £325,000.

Since October 2007, any unused NRB from a late spouse or civil partner can be transferred for the use of the second spouse or civil partner when they die. This is known as the Transferable Nil-Rate Band (TNRB). This means that the second partner’s effective NRB can potentially be as much as twice the standard NRB, depending on the circumstances (up to £650,000).

From April 2017, an additional tax-free allowance has been available for when an estate transfers a main UK residence on death to their direct descendants (for instance, a child or grandchild). This is known as the Residence Nil-Rate Band (RNRB). In the tax year 2017 to 2018, it was worth £100,000, and increased by £25,000 increments each year until it reached its target of £175,000 in the tax year 2020 to 2021. It has since been maintained at this level. This is shown in Table 1.

Table 1: Value of residence nil rate band in stated tax year

Tax year

Value of residence nil rate band

2017 to 2018

£100,000

2018 to 2019

£125,000

2019 to 2020

£150,000

2020 to 2021 onwards

£175,000

Similar to the TNRB, any unused RNRB from a late spouse or civil partner can be transferred for the use of the second spouse or civil partner when they die. This is known as the Transferable Residence Nil-Rate Band (TRNRB). This means that the second partner’s effective RNRB can potentially be as much as twice the standard RNRB, depending on the circumstances (up to £350,000).

Taken together, combining these allowances can mean that an estate could benefit from up to £1 million in tax-free allowances (£325,000 NRB + up to £325,000 TNRB + up to £175,000 RNRB + up to £175,000 TRNRB) as Table 2 shows.  

Table 2: Tax-free allowances available in the IHT system and their eligibility requirements

Tax-free allowance	Value in tax year 2020 to 2021 up to and including 2027 to 2028	Eligibility
Nil rate band (NRB)	£325,000	Available to all estates.
Residence nil rate band (RNRB)	Up to £175,000	Available to qualifying estates which transfer a main UK home to direct descendants.
Transferrable nil rate band (TNRB)	Up to £325,000	Available to estates whose spouse or civil partner has pre-deceased them and who did not use all their allowance at the time of their death.
Transferrable residence nil rate band (TRNRB)	Up to £175,000	Available to qualifying estates which transfer a main UK home to direct descendants, and whose spouse or civil partner pre-deceased them and did not use all their allowance at the time of their death.
Total combined allowance	£325,000 up to £1,000,000	NRB available to all estates. TNRB, RNRB, and TRNRB available if above eligibility requirements are met.

More information on IHT thresholds is available in the Inheritance Tax guidance.

IHT Thresholds for trusts work slightly differently. More information about the thresholds available to trusts is available in the Inheritance Tax and Trusts guidance.

Exemptions

Not all wealth transfers are subject to IHT. The main exemptions include:

• Transfers between spouses and (from 5th December 2005) civil partners (subject to some limitation if the transferee is domiciled abroad); and

• Transfers to qualifying registered charities and community amateur sports clubs.

Reliefs

Subject to certain conditions, the value of agricultural property and business assets, including unlisted shares or securities, is reduced by 100% or 50%, according to the nature of the interest transferred, and tax is assessed on the reduced value. Before 10th March 1992, the rates of relief were 50% and 30% respectively.

Where tax is payable on the death of a person who received property within 5 years under a chargeable transfer, the tax payable on the second occasion is reduced. Similar relief is also awarded to a lifetime charge on the termination of an interest in possession in settled property.

The tax payable may also be reduced by double taxation relief. If death duties are paid in another country on property situated there, the foreign duty may be deducted from any UK tax on the same property.

Further information on IHT rules, reliefs and exemptions are available in the Inheritance Tax guidance.

Deferred payment

Tax payments may be deferred in respect of:

• Heritage property qualifying for the conditional exemption. The exemption will be invalid if the property is sold or the owner fails to observe the conditions of the exemption. If the owner makes a gift of the property or dies, tax may be payable unless the conditional exemption is again claimed.

• Timber transferred on death. Tax only becomes payable if timber is sold or disposed of before it is transferred again on another death.

4.1 Statistical unit

The unit in the statistics in Tables 12.1 – 12.4 is estates required to notify HMRC of wealth transferred via IHT returns in order to obtain a grant of representation (known as ‘probate’, or ‘confirmation’ in Scotland). In some instances, these estates pay IHT; Tables 12.5 and 12.8 – 12.9 provide statistics on these estates.

The statistics also include information on payments of IHT by trusts whenever a chargeable event occurs; Tables 12.6 and 12.7 provide statistics on entry, ten year anniversary, or exit (proportionate) charges faced by taxpaying trusts.

4.2 Statistical population

All estates required to notify HMRC of wealth transferred in the UK in order to obtain a grant of representation. The statistics also include information on payments of IHT by trusts.

Following a reporting requirement change from 1 January 2022, non-taxpaying estates which are classed as ‘excepted’ are no longer required to report their valuations to HMRC via IHT forms or notify HMRC that they have obtained a grant of representation. As such, their details are no longer included in these statistics, which now have reduced coverage. For more information, please the policy paper announcing the changes.

4.3 Reference area

The geographic region covered by the data is the United Kingdom (UK).

4.4 Time coverage

Tax liability statistics are provided for the latest available complete single tax year, currently 2021 to 2022. In certain tables, information for earlier years is also available.

5. Statistical processing

5.1 Source data

Tax liabilities

The data for IHT liabilities on estates (Tables 12.1 – 12.5, 12.8 – 12.9 comes from IHT assessments and returns for taxpaying or large non-taxpaying estates completing IHT400 returns. 100% of these returns for taxpaying estates are used in compiling the statistics, while a sample of non-taxpaying estates are used. This sample is stratified by type of the estate for IHT purposes, the size of the estate and the age of the person passing the estate on death.

This is supplemented with a sample of records for smaller non-taxpaying estates completing IHT205 returns online. This sample is also stratified by type of the estate for IHT purposes, the size of the estate and the age of the person passing the estate on death.

The available data for each estate is as recorded on either the IHT400 or IHT205 returns, including any modifications or additions made in subsequent assessments. The IHT400 and IHT205 returns are used by HMRC to establish liabilities for IHT and contain a systematic record of the estate’s IHT calculations, starting with the value of the estates’ assets and lifetime gifts and taking into account any relevant debts, exemptions, reliefs and tax-free thresholds.

The data for IHT trust charges (Tables 12.6 and 12.7) comes from IHT assessments and returns for taxpaying trusts completing IHT100 returns.

5.2 Frequency of data collection

The data are compiled on an annual basis.

5.3 Data collection

Data on IHT liabilities are sourced from the HMRC COMPASS administrative system.

Tax liability data for estates are acquired by HMRC when the personal representatives of a deceased’s estate submits a completed IHT400 or IHT205 return, together with any accompanying schedules. Tax liability data for trusts are acquired by HMRC when the trustees of a trust facing an IHT trust charge submits a completed IHT100 return.

These paper returns are normally submitted to HMRC by post, with the relevant information from those returns being digitally captured by HMRC caseworkers into the COMPASS administrative system.  COMPASS detects errors in the tax calculation in real time once the relevant estate information has been digitally captured and displays messages on the HMRC caseworker’s computer screen.

5.4 Data validation

Checks carried out on the data include:

• Analyst checks are carried out when downloading data from the analysis database. Inconsistencies in variables are automatically ‘repaired’ if possible; otherwise the record is flagged and is checked against the latest record in COMPASS.

• Analysts check that the number of records loaded into the analysis database is as expected. This is compared to most recent forecasts for the number of taxpaying estates produced by the OBR from the most recent fiscal event on their website.

• Reports are run showing the estates and trusts with the largest values of assets, debts, reliefs, exemptions, and tax liabilities. These records are examined individually against both the live record held in COMPASS and the original tax return, and if deemed to be incorrect may be adjusted in the analysis database.

• Large changes in liabilities figures from one statistical release to the next are investigated.

5.5 Data compilation

Imputation and grossing for missing data

Imputation (where missing data items in records are created to ‘fill in’ a distribution) is not relevant for these statistics.

For non-taxpaying estates where data is not available for a particular year, the values of assets, lifetime gifts, debts, exemptions, and reliefs are grossed from their sample values to estimate the true population values of estates completing IHT returns and obtaining grants of representation in a given tax year using statistical samples.

Aggregating data

Data are aggregated using a unique taxpayer reference number assigned to each estate or trust.  This unique number does not change across financial or tax years.

Data for certain variables used in the statistics are derived by aggregating variables into larger categories. For instance, the gross capital value variable is the sum of all assets in the estate. The net capital value is gross capital value less the total of any debts, such as funeral expenses or outstanding mortgage payments, but before the use of reliefs, exemptions, and nil-rate bands.

6. Quality Management

6.1 Quality assurance

All official statistics produced by KAI must meet the standards in the Code of Practice for Statistics produced by the UK Statistics Authority (UKSA).

Analytical Quality Assurance describes the arrangements and procedures put in place to ensure analytical outputs are error free and fit-for-purpose.

Every piece of analysis is unique, and as a result there is no single quality assurance (QA) checklist that contains all the QA tasks needed for every project. Nonetheless, analysts in KAI use a checklist that summarises the key QA tasks, and is used as a starting point for teams when they are considering what QA actions to undertake.

Teams amend and adapt it as they see fit, to take account of the level of risk associated with their analysis, and the different QA tasks that are relevant to the work.

At the start of a project, during the planning stage, analysts and managers make a risk-based decision on what level of QA is required.

Analysts and managers construct a plan for all the QA tasks that will need to be completed, along with documentation on how each of those tasks are to be carried out, and turn this list into a QA checklist specific to the project.

Analysts carry out the QA tasks, update the checklist, and pass onto the Senior Responsible Officer for review and eventual sign off.

6.2 Quality assessment

The QA for this project adhered to the framework described in ‘4.1 Quality assurance’ and the specific procedures undertaken were as follows:

Stage 1 – Specifying the question

Up to date documentation was agreed with stakeholders setting out outputs needed and by when; how the outputs will be used; and all the parameters required for the analysis.

Stage 2 – Developing the methodology

Methodology was agreed and developed in collaboration with stakeholders and others with relevant expertise, ensuring it was fit for purpose and would deliver the required outputs.

Stage 3 – Building a piece of code

• Analysis was produced using the most appropriate software and in line with good practice guidance.

• Data inputs were checked to ensure they were fit-for-purpose by reviewing available documentation and, where possible, through direct contact with data suppliers.

• QA of the input data was carried out.

• The analysis was audited by someone other than the lead analyst – checking code and methodology.

Stage 4 – Running and testing the code

• Results were compared with those produced in previous years and differences understood and determined to be genuine.

• Results were compared with comparable independent estimates, and differences understood.

• Results were determined to be explainable and in line with expectations.

Stage 5 – Drafting the final output

• Checks were completed to ensure internal consistency (e.g. totals equal the sum of the components).

• The final outputs were independently proofread and checked.

7. Relevance

7.1 User needs

This analysis is likely to be of interest to users under the following broad headings:

• national government – policy makers and MPs

• regional and local governments

• academia and research bodies

• media

• business community

• general public

7.2 User satisfaction

HMRC recently ran a consultation on changes to its statistical publications. As a result of the feedback from users received in this consultation exercise, the coverage of these statistics has changed. For a summary of the feedback received and HMRC’s consultation response, please see the relevant section on the inheritance tax statistics.

7.3 Completeness

Prior to 1 January 2022, it was a legal requirement that all estates must submit either an IHT400 or IHT205 (C5 in Scotland) Inheritance Tax return before a grant of representation can be obtained. Penalties exist for non-compliance.

A grant of representation may also not be needed for low-value estates – generally worth less than £5,000 – or estates which were held in joint names and which pass to the surviving spouse or civil partner. Such estates represent just over half of total deaths in a given year. Their omission from the statistics has no implications for estimates of the numbers of taxpayers or tax due, as they are not taxable estates. This is because IHT is a wealth transfer tax, so if no wealth has been transferred, no potentially taxable event has taken place. However, this does impact the total value of assets held at death reported in certain statistical tables in this publication. Although some of these estates are of a low value, others will be of an indeterminate value as jointly held assets could be of any value.

For trusts, all trusts which have a chargeable transfer that exceeds 80% of the NRB must complete the relevant IHT100 form. Information for the most recent years is deemed to be incomplete because of delays in submitting accounts and digitising these in HMRC’s systems; therefore, complete information is not available for some time after the relevant chargeable event. As such, normally the estimates in the statistics for the most recent years should be used with caution as they do not represent the total population. Estimates will be subject to further revisions in future publications as more information becomes available.  For more information on IHT and trust reporting requirements, please see the relevant Trusts and Inheritance Tax guidance.

8. Accuracy and reliability

8.1 Overall accuracy

This analysis is based on administrative data, and accuracy is addressed by eliminating non-sampling errors as much as possible through adherence to the quality assurance framework.

The potential sources of error include:

• Personal representatives of estates entering incorrect information onto the IHT400 or IHT205 (C5 in Scotland) Tax Return forms.

• Trustees entering incorrect information onto the IHT100 Tax Return forms.

• Human or software error when entering the data into the COMPASS system.

• Personal representatives or trustees not completing their tax return forms by the required date.

• Mistakes in the programming code used to analyse the data and produce the statistics.

8.2 Sampling error

The data for non-taxpaying estates in this release is based on a sample, taken from both the COMPASS administrative system and from those estates which submit their IHT205 returns online. As such, there will be sampling variability around all estate-based estimates in this publication. This increases as the number of estates included in the sample reduces (e.g. for some breakdowns published).

Tables 12.3, 12.4 and 12.5 are published only for the latest available tax year on a liabilities basis, as these tables are not intended to be used as a time series. Were these tables to be compared to those from earlier publications, fluctuations in the data could be reflective of sampling error as opposed to a true change in the composition of non-taxpaying estates.

8.3 Non-sampling error

Coverage error

Prior to 1 January 2022, all estates where a wealth transfer takes place must submit the relevant form to HMRC for Inheritance Tax prior to a grant of representation being obtained. Without this, the estate cannot be wound up and any assets sold or distributed.

Following a reporting requirement change from 1 January 2022, non-taxpaying estates which are classed as ‘excepted’ are no longer required to report their valuations to HMRC via IHT forms or notify HMRC that they have obtained a grant of representation. As such, their details are no longer included in these statistics, which now have reduced coverage. For more information, please the policy paper announcing the changes. However, the estate must still declare that they are ‘excepted’ on the relevant UK Court Services forms (HMCTS, SCTS, and NICTS) before receiving a grant of representation.

Coverage error is therefore not relevant.

All trusts paying IHT trust charges following a chargeable event must submit the relevant form to HMRC. Coverage error is therefore not relevant.

Measurement error

The main sources of measurement error could be categorised as respondent errors and include the following:

• Personal representatives of estates may make errors entering their information onto the IHT400 or IHT205 (C5 in Scotland) tax return form, whether this is done on paper or electronically.

• Trustees may make errors entering their information onto the IHT100 tax return form, whether this is done on paper or electronically.

• Tax Return data is subsequently entered onto the COMPASS system manually, which is another point at which data may be altered due to human error.

There is a risk that errors involving very large asset, debt, exemption or relief valuations, or large tax amounts, may distort the overall statistics. To mitigate against this, checks are conducted on the analysis database before the statistics are produced, and any incorrect large values detected are altered.

Nonresponse error

All estates where a wealth transfer takes place must either submit the relevant IHT form to HMRC prior to a grant of representation being obtained through the UK Courts Services, or following a reporting requirement change from 1 January 2022, declare to the Courts Services that they are ‘excepted’. There is therefore a delay between when the deceased passes away (and the wealth transfer is assumed to have taken place) and the estate obtaining the grant of representation.

Normally, this delay is less than 18 months, but there are a small number of instances where this delay can be longer. In these cases, affected estates will obtain their grant of representation after the statistics for that tax year have been published. As such, statistics on these estates will be missing.

For estates where data is not yet available for a particular year, estimations are used for the number of estates which will obtain a grant of representation after the statistics have been published based on historical data. A small grossing factor is then applied to scale the statistics to represent the entire population of estates requiring a grant of representation for the relevant tax year.

All trusts where a charge is due must submit the relevant form to HMRC. However, there is a delay between when the chargeable event takes place and when any tax is subsequently paid. Information for the most recent years is deemed to be incomplete because of delays in submitting accounts and digitising these in HMRC’s systems; therefore, complete information is not available for some time after the chargeable event. As such, normally the estimates in the statistics for the most recent years should be used with caution as they do not represent the total population. Estimates will be subject to further revisions in future publications as more information becomes available.  

Processing error

It is possible that errors exist in the programming code used to analyse the data and produce the statistics. This risk is reduced through developing a good understanding of IHT tax calculations and relationships between reported IHT variables, and thoroughly reviewing and testing the programs that are used.

8.4 Data revision

Data revision – policy

The United Kingdom Statistics Authority (UKSA) Code of Practice for Official Statistics requires all producers of Official Statistics to publish transparent guidance on the policy for revisions.

Data revision – practice

This analysis is published annually and includes an estimate of tax liabilities for estates for the latest available complete tax year. We do not regularly revise statistics for previous years. 

IHT assessments are subject to revision and although the majority of assessments are finalised within two years, consistent with the release schedule, there are exceptional cases that can take much longer. There is, therefore, no specific point at which all the IHT liabilities for estates for a particular year can be considered as ‘final’.

8.5 Seasonal adjustment

Seasonal adjustments are not applicable for this analysis.

9. Timeliness and punctuality

9.1 Timeliness

There is a difference in the timeliness of Inheritance Tax receipts and liabilities data. This is due to when estates must pay their IHT (receipts) compared to when the deceased passed away (liabilities arise) and when they submit their IHT Return form, and also how we aggregate the data for analysis.

Data for receipts are aggregated into financial years, which run from 1st April until 31st March the following calendar year. Receipts figures are available following the publication of HMRC’s trust statement and accounts for the latest available complete tax year. Receipts statistics are available in the HMRC bulletins on tax receipts for the UK. They are no longer reported in this publication.

Data for tax liabilities are aggregated into tax years, which run from 6th April until 5th April the following calendar year. Tax liability statistics are available for the tax year 2 years prior to the latest available complete tax year. For instance, tax liabilities data for the tax year 2021 to 2022 is available once the tax year 2023 to 2024 is complete. This is because tax liabilities data is only available with a long lag due to the period of time given to estates for valuation of assets and tax payment (if applicable), as well as the time required to clean and process the data.

Inheritance Tax Returns can be submitted up to 12 months after the end of the month in which the deceased passed away. However, estates must make their first IHT payment up to 6 months after the end of the month in which the deceased passed away before interest starts to be charged. IHT can be paid in instalments of up to 10 years if the estate contained property. There can be delays in either making payments or submitting returns if the estate is complex or difficult to value. This causes a time lag between receipts and liabilities.

This analysis is published in the summer, providing statistics for tax years that end in April.  The reason for the delay is due in part to the time required to complete the complex analysis and quality assurance.  It is also due to Inheritance Tax Returns being submitted late. If publication was brought forward to earlier in the year, there would be many missing returns for which imputed data would be necessary. This would lead to less reliable statistics being released.

9.2 Punctuality

In accordance with the Code of Practice for official statistics, the exact date of publication will be given not less than 4 weeks before publication on both the Schedule of updates for HMRC’s statistics and the Research and statistics calendar of GOV.UK.

Any delays to the publication date will be announced on the HMRC National Statistics website.

The full publication calendar can be found on both the Schedule of updates for HMRC’s statistics and the Research and statistics calendar of GOV.UK.

10. Coherence and comparability

10.1 Geographical comparability

This analysis is presented for a single region – the United Kingdom.

10.2 Comparability over time

Statistics on a liabilities basis use complete returns data for IHT taxpaying estates, but a sample of records for non-taxpaying estates. These are taken from both the COMPASS administrative system and from those estates which submit their IHT205 returns online. As such, there will be sampling variability around all estimates based on the data in this sample. This increases as the number of estates included in the sample reduces.

For Tables 12.3, 12.4 and 12.5, we only provide data for the latest available tax year on a liabilities basis, as these tables are not intended to be used as a time series. Were these tables to be compared to those from earlier publications, fluctuations in the data could be reflective of sampling error as opposed to a true change in the composition of non-taxpaying estates.

10.3 Coherence – cross domain

There are no other sources or statistics that provide data on wealth transfers at death in the UK for which a grant of representation was required. As such, coherence issues are not relevant.

Coherence – sub-annual and annual statistics

All statistics are presented as annual outputs.  No coherence issues exist.

Coherence – national accounts

This publication shows IHT liabilities for each tax year (where applicable).

For National Accounts purposes, receipts figures as published in HMRC bulletins on tax receipts for the UK are used as the relevant National Accounts Basis (NABs), as published by the Office for National Statistics (ONS) in the Public Sector Finance publication.

The cash receipts figures are published under the time series code ACCH, and the non-cash receipts figures are published under the time series code LSON.

10.4 Coherence – internal

Rounding of estimates may cause some minor internal coherence issues as the figures within a table may not sum to the total displayed.  Effort has been made to ensure totals between tables remain constant where appropriate.

10.5 Coherence – HMRC statistical publications on trusts

HMRC publishes statistics about trusts in both Statistics on trusts in the UK and Inheritance Tax liabilities statistics. The different data sources for each publication lead them to covering different sets of trusts each year, these depending on the circumstances of the individual trust.

Statistics on trusts in the UK is primarily based on data submitted as part of the annual Self Assessment (SA) process. This typically means that there were tax liabilities that arose from either income received, or distributed to beneficiaries, in a particular tax year. In recent years trusts and estates with only savings interest income and resulting tax liabilities of below £100 have received a concession, which has removed them from Income Tax. This means this publication will not include trusts who are not receiving taxable income, for example, trusts which are holding assets for the longer term, or those receiving small amounts of savings income annually.

Inheritance Tax liabilities statistics for trusts are based on data submitted in Inheritance Tax returns which cover assets being:

• transferred into trusts (entry charges); or

• held within trusts (at ten year anniversary charges); or

• removed from trusts (exit charges).

There are some instances where the value of trust assets is included in the estate of the deceased. For more information, please see the HMRC guidance on dealing with a trust when someone dies. Inheritance Tax liabilities statistics focus on trusts which have a tax liability so will not include trusts with valuations below the nil rate band for Inheritance Tax. Trusts paying out income will not necessarily generate an exit charge, but if that income is converted to capital it will become subject to ten year anniversary charges or exit charges if paid out to a beneficiary.

11. Accessibility and clarity

11.1 News release

There haven’t been any press releases linked to this data over the past year.

11.2 Publication

The tables and associated commentary are published on the Inheritance Tax liabilities statistics webpage of GOV.UK.

Tables are published in the OpenDocument format, and the associated commentary as an accessible HTML webpage.

Both documents comply with the accessibility regulations set out in the Public Sector Bodies (Websites and Mobile Applications) (No. 2) Accessibility Regulations 2018. 

Further information can be found in HMRC’s accessible documents policy.

11.3 Online databases

This analysis is not used in any online databases.

11.4 Micro-data access

Access to this data is not possible in micro-data form, due to HMRC’s responsibilities around maintaining confidentiality of taxpayer information.

11.5 Other

There are no other dissemination formats available for this analysis.

11.6 Documentation on methodology

Transfers on death

Prior to 1 January 2022, information must be provided to HMRC in respect of all estates for which a grant of representation (i.e. ‘probate’ or ‘letters of administration’ in England, Wales and Northern Ireland or ‘Confirmation of executors’ in Scotland) is required, not just for those estates which are taxpaying.  The statistics are based on probate data and the various IHT returns, primarily the IHT400 returns for those estates likely to be taxpaying and the IHT205 returns for those that are not taxpaying.

A grant of representation may also not be needed for low-value estates - generally worth less than £5,000 – or estates which were held in joint names and which pass to the surviving spouse/civil partner. Such estates represent just over half of total deaths in a given year. Their omission from the statistics has no implications for estimates of the numbers of taxpayers or tax due, as they are not taxable estates. However, this does impact the total value of assets held at death reported in certain statistical tables in this publication. Although some of these estates are of a low value, others will be of an indeterminate value as jointly held assets could be of any value.

Some estates may be omitted from the relevant data set on account of delays in settling valuations and/or being in receipt of the payment in full. Because of these delays, the latest year of death for which detailed analyses of assets and exemptions are given is two tax years before the date of publication. As such, tables published in July 2024 relate to the 2021 to 2022 tax year. This helps to minimise the extent to which estates left on death are not included in the statistical tables.

A sample is taken based on the type of the estate for IHT purposes, the size of the estate and the age of the person passing the estate on death. The estates are grossed up based on total probate/confirmation data provided by the three UK Courts Services.

Other transfers

The data on IHT trust charges are extracted from the accounts on which the relevant IHT trust charge is paid. Because of delays in submitting accounts and reaching a consensus regarding the value of the trust, complete information is not available for some time after the chargeable event. The data for more recent years in particular are, therefore, less complete than for earlier years and may be revised upwards when further updates to Tables 12.6 and 12.7 are published in subsequent years.

Regional breakdown

The data is divided by geographical areas for taxpayer numbers and tax liabilities according to the postcode of the reported main residence of the deceased. This is done for all estates with a tax liability greater than zero with a year of death in the tax year 2021 to 2022. Note that IHT is a tax based on the domicile of the deceased, rather than the reported residency status, and so regional breakdowns are provided for illustrative purposes only. For more information about IHT rules and domicile status, please see the gov.uk guidance.

The geographies used are administrative Government Office Regions as defined by ONS Open Geography Portal. Also included is a breakdown by Westminster (UK) Parliamentary Constituencies. A full list of geographic regions can be found on the ONS website.

Around 5%-10% of cases where information was provided to HMRC on tax returns about estates with a tax liability had postcodes which were either missing, invalid, in Guernsey, Jersey or the Isle of Man, or were foreign addresses.

Quality documentation

All official statistics produced by KAI must meet the standards in the Code of Practice for Statistics produced by the UK Statistics Authority and all analysts adhere to best practice as set out in the ‘Quality’ pillar.

12. Cost and burden

Data for the Inheritance Tax National Statistics is obtained from several administrative data sources, i.e. COMPASS for taxpaying estates or larger estates completing IHT400 forms, and the IHT Online system for estates completing IHT205 forms. As such, there is no additional burden on estates or HMRC tax inspectors to provide information for the estates digitally captured into these systems.

It is estimated to take about 30 days FTE to produce the annual analysis and publication.

13. Confidentiality

13.1 Confidentiality – policy

HMRC has a legal duty to maintain the confidentiality of taxpayer information.

Section 18(1) of the Commissioners for Revenue and Customs Act 2005 (CRCA) sets out our duty of confidentiality.

This analysis complies with this requirement.

13.2 Confidentiality – data treatment

The statistics in these tables are presented at an aggregate level so identification of individual estates or trusts is not possible. 

To make sure no individual taxpayers or customers can be identified, statistical disclosure control (SDC) is applied to cells within tables.  SDC is the application of methods to ensure confidential data is not disclosed to parties who don’t have authority to access it.

SDC modifies published data so that the risk of data subjects being identified is within acceptable limits while making the data as useful as possible.

Disclosure in this analysis is avoided by applying rules that prevent publication of categories of data containing:

• small numbers of contributors; and

• small numbers of contributors that are very dominant

If a cell within a table is determined to be disclosive, its contents are suppressed either by removing the data or combining categories.

Further information on anonymisation and data confidentiality best practice can be found on the Government Statistical Service’s website.