HMRC update over major change to inheritance tax for all who pay

HMRC has shared an update on a major change coming in to the system for paying inheritance tax . Families have to pay the 40 percent tax on the total assets they inherit above certain allowances. You can pass on up to £325,000 in assets without paying the tax on this amount, plus an additional £175,000 when passing on a main residence to a direct descendant.

Any unused allowances can be passed on between spouses or civil partners. This means the second partner's allowances effectively double, and when they die they can pass on up to £1million in assets tax-free, should they pass on their main home.

If you have an inheritance tax bill to settle, there are several HMRC forms to be aware of. One of these is the IHT400, where you provide details of their estate to calculate the tax that needs to be paid.

Once you have paid the amount, you can fill in a IHT30 form to apply for a clearance certificate, showing you have paid all the tax due on the estate. Labour MP James Naish asked Chancellor Rachel Reeves in a written question in Parliament, what is the average time for an IHT30 certificate to be issued in the latest figures.

He also asked how many cases were waiting for an IHT30 certificate to be issued, as of August 1, 2025. Treasury minister Dan Tomlinson issued a response.

He said that HMRC does not keep records on the average time for an IHT30 certificate to be issued, but there is a standard that the department processes 80 percent of certificates within 15 working days.

The minister also said: "HMRC have prioritised the processing of IHT400 forms to minimise any delays for customers applying for probate through HM Courts & Tribunals Service. Customers do not need an IHT30 certificate to distribute assets to beneficiaries."

Mr Tomlinson also spoke about some of the plans underway to improve inheritance tax system. He said: "HMRC have trained and deployed additional staff to work on inheritance tax, and are investing £52million to digitalise the inheritance tax service from 2027-28 to provide a modern, easy-to-use system, making returns and paying tax simpler and quicker."