While less than 5% of deaths attract any charge at all, total net capital value of estates has increased from £62bn in 2009-10 to £79bn in 2015-16, with around 54% of this increase being in residential property.

Receipts data is available for the 2017-18 tax year as the information is based on payments received by HMRC, but other data relating to the composition of estates, the use of reliefs and to the tax due on estates is provided for estates assessed in the 2015-16 tax year.

The delay is due to both the 6-month lag from date of death to when the IHT becomes due and subsequent time lags while the data from tax returns is prepared for analysis on HMRC’s databases.

IHT receipts totalled £5.2bn in 2017-18, an increase of 8% (£388m) compared to 2016-17. IHT receipts have been increasing since 2010-11. There was a 22% increase in receipts from 2014-15 to 2015-16, which reflects an estimated 43,900 excess winter deaths in 2014-15.

In 2015-16 4.2% of all UK deaths were subject to IHT, a 0.3% increase on the 2014-15 period. This continues a long-term trend identified in 2008-09 and is partly due to a freezing of the nil-rate band (NRB) at £325,000 in April 2009.

The total number of liable estates has increased every year since 2009-10. In 2015-16 there were 24,500 liable estates, an increase of 1,300 since 2014-15.

IHT receipts totalled £5.2bn in 2017-18; this is an increase of 8% (£388m) compared to 2016-17 and has been increasing since 2010-11. There was a 22% increase in receipts from 2014-15 to 2015-16, which reflects an estimated 43,900 excess winter deaths in 2014-15.

The total number of liable estates has increased every year since 2009-10. In 2015-16 there were 24,500 liable estates, an increase of 1,300 since 2014-15.

The ONS report says that wealthier estates contribute nearly half of total IHT revenue but represent only 1% of those valued at over the NRB.

‘Net estates valued £2m and over account for 40% (£1.76bn) of the tax liability in 2015-16, however this group represents only around 1% of all estates requiring grant of representation. The majority of this group’s estate value is made up of securities and other assets (includes insurance policies, other buildings and land, loan and other assets), and around 2,250 estates make up 13% (£10.7bn) of all gross assets,’ say the report authors.

‘At the lower end of estate value distribution, 56% of all gross assets are held in net estates valued less than £500,000. This group represents around 237,300 of all probate estates (87%), and they own around £46.5bn in gross assets, of which £26.5bn is held in residential property and £13.7bn in cash. Where net estate value is less than £2m, estates are likely to consist mainly of residential property and cash. Above this limit, estates are more likely to consist of securities and other assets, which attract reliefs like Agricultural Property Relief (APR) and Business Property Relief (BPR). This has a tendency to lower the average tax rates,' they conclude.

Nigel May, tax partner at MHA MacIntyre Hudson, commented: ‘The figures reveal how unimportant inheritance tax is in terms of the government’s overall tax receipts; it is dwarfed by income tax, national insurance contributions and VAT.

‘In addition to the low yield, inheritance tax is hideously complicated and iniquitous. This situation has worsened in recent years with the introduction of new rules on the indirect ownership of UK residential property.

‘If you have, for example, an individual from New Zealand holding UK residential property through a New Zealand company and that individual dies, the New Zealand executors are unlikely to be aware of UK inheritance tax; the system essentially begs non-compliance.

‘The tax also forces families to sell inherited properties as, given low rents, rental income is rarely enough to meet the annual inheritance tax charges and keep the property economical.

‘To combat some of this unfairness, inheritance tax is liable to a form of relief known as the main residence nil band rate, designed to ease the burden on estates worth more than £650,000, but tapering away for estates worth more than £2 million. If a specific tax relief has to be introduced to cater for such a small group of individuals, the tax itself is likely badly designed.’