The amount of money paid to HM Revenue & Customs in inheritance tax has reached its highest level since 1986.
In 2016/17 inheritance tax receipts were £4.84bn – 4 per cent higher than the previous year and the highest level since the current system was introduced.
HMRC has said this has primarily been driven by rising asset values, with residential property making up around a third of the total value of taxpaying estates.
As the average value of estates rises, an increasing number of estates are now valued over the IHT nil rate band, which has been frozen at £325,000 since April 2009.
This will be the last year of figures before the main residence nil-rate band comes into effect.
Since April 2017 there has been a £100,000 nil-rate band when a residence is passed on death to a direct descendant.
This will gradually increase to £175,000 by 2020/21 and from then on it will increase in line with CPI inflation.
Together with the inheritance tax nil-rate band and the ability to transfer unused main residence nil-rate band to a surviving spouse or civil partner, this allowed the government to claim there will be an effective inheritance tax threshold of £1m in 2020 to 2021.
Figures from HMRC published today also showed the proportion of deaths liable to IHT has also increased to nearly 4 per cent in 2014/15.
This is the highest level since 2007/08 but still lower than the peak in 2006/07 when 6 per cent of deaths were liable to IHT.
The average net capital value of those estates passing on death in 2014-15 which were liable to an inheritance tax charge was around £983,000 compared to an average net capital value of around £289,000 for all estates requiring a grant of representation.
A grant of representation is required on a person's death in order to access their bank accounts, if they had more than £5,000 and no spouse.
One of the biggest differences between estates requiring a grant of representation and those with an IHT liability is in the amount of securities held by the latter group.
Estates which were liable to IHT held an average of £280,000 in securities compared to an average of £45,000 for all estates requiring a grant of representation.
UK residential buildings account for 52 per cent of the gross capital value of the average estate requiring a grant of representation, but for only 40 per cent of the value of the average taxpaying estate.
Dan Farrow, director of Essex-based SBN Wealth Management, said: "My exposure to IHT has been limited because I have not had many deaths yet.
"But there is not a silver bullet. Would you advice an 80-year-old with an IHT issue to invest in a portfolio of Aim shares? Would you recommend a whole-of-life plan? Personally I wouldn't because the premiums would be astronomical.
"The most efficient option is to gift the money away but can you gift your home away? When people start thinking about that is is probably too late anyway."
damian.fantato@ft.com
