Inheritance Tax (IHT) continues to make headlines, and for good reason. According to the latest forecasts, the amount collected by the government is expected to reach a record £8.7 billion in the 2025–26 tax year.
As property values and investment portfolios grow, more families are finding themselves within the scope of IHT. Increasingly, this is prompting families to think not just about managing wealth today, but about how it will eventually pass to the next generation.
Why more families are paying IHT
One of the key reasons behind rising IHT receipts is something known as “fiscal drag.”
The main tax free allowance, known as the nil rate band, has been frozen at £325,000 since 2009. Meanwhile, the value of homes, savings and investments has continued to rise. This means that even families who never expected to face inheritance tax may now find their estates falling within its scope.
Why involving the next generation matters
Estate planning often focuses on the practical steps – writing a will, using available allowances, or gifting assets wisely. But an essential part of good planning is sometimes overlooked: bringing the next generation into the conversation.
Many parents avoid talking about money with their children, often because they don’t want to worry them or they prefer to keep details private. But these discussions don’t have to be about sharing numbers or revealing your full financial picture. Instead, they can focus on:
- How you think about long term financial security
- The principles behind good investing
- Why planning matters
- How you’d like your wealth to support future generations
Over time, these conversations help younger family members build confidence and understand both the opportunities and responsibilities that come with managing family wealth.
Planning as a family
We can help your family approach these conversations in a clear and constructive way, explaining the structure of financial plans and helping everyone understand the long-term intentions behind them.
If you would like help starting these conversations with your family, your Insight independent financial adviser can guide you through the options and help structure a plan that works across generations.
We often meet our clients with their families and go on support family members with their own financial planning. Talk to us about family financial planning > [Insight email]
Sources and further reading
https://obr.uk/forecasts-in-depth/tax-by-tax-spend-by-spend/inheritance-tax/
https://www.gov.uk/government/publications/inheritance-tax-thresholds/inheritance-tax-thresholds
Inheritance Tax nil-rate band and residence nil-rate band thresholds from 6 April 2026 to 5 April 2028 – GOV.UK
Disclaimer: information is based on publicly available data and government announcements at the time of writing (April 2026) and may be subject to change.