Government receipts from Inheritance Tax (IHT) surged by £200 million in the three months from April to July, according to new official figures.

The total raised from what has become known as Britain’s most hated tax in the three months rose 9 percent to £2.8 billion.

Finance experts believe this is only a small indication of things to come with the Chancellor Rachel Reeves expected to announce plans to rake in billions more in death taxes in the Budget in October.

Private pension pots are in the firing line with the Chancellor expected to end the ability of people to pass on these nest eggs to loved ones free of inheritance tax.

Other exemptions to paying IHT, including family businesses, certain share investments and farms, could also be removed or tweaked.

Rules that allow people to pass on cash and assets to children without paying IHT, providing they survive for at least seven years after making the gift, could also be changed.

Finance industry experts argue there is a good case to encourage more tax free gifting from older people to their adult children to, for example, support their efforts to get on the property ladder.

Alastair Black, head of savings policy at Abrdn, said: “Without any IHT reform, these numbers will only continue to rise. In fact, the OBR has projected receipts could reach £9.7bn by the end of the decade.

“Following Rachel Reeves’ announcement of a £22bn ‘hole’ in UK finances, speculation is rife about potential tax hikes, with IHT mooted as one possibility. With this in mind, we eagerly anticipate what will be unveiled in the upcoming Budget.”

However, he warned any changes could have far-reaching consequences.

“They might deter investment needed to boost economic growth or complicate matters for consumers who have made significant financial decisions based on the current rules, potentially requiring intricate transitional arrangements. Any proposed changes are far from straightforward.”

Mr Black said if changes are made, Abrdn would like to see IHT simplified and recalibrated.

Rachael Griffin, tax and financial planning expert at Quilter, said the £200m increase in IHT payments to the Treasury “will rekindle debates about whether this tax will be increased as the government attempts to shore up public finances”.

She said: “Speculation is rife that the chancellor might introduce changes to IHT, particularly targeting Agricultural Property Relief (APR) and Business Property Relief (BPR).

“These reliefs, which currently allow farms and family businesses to be passed down without incurring prohibitive tax liabilities, might be scaled back.

“As Labour navigates these complex issues in the upcoming budget, there is a strong argument for simplifying the IHT system and making it more appealing to gift during your lifetime.

“The current system’s complexity often leads to confusion and inequities, with wealthier estates better equipped to navigate and minimise tax liabilities.

“A simpler system could not only reduce administrative burdens for taxpayers and HMRC but also make the tax fairer. Increasing the gifting allowances also would encourage more wealth to cascade down the generations.”

Stephen Lowe, group communications director at retirement specialist Just Group, said: “Another month and another boost for the Treasury from inheritance tax.

“But with the Autumn Statement in two months’ time, it seems inevitable that the chancellor will at the very least run her slide rule over inheritance tax to see if it’s a way to raise more revenue.”

Nick Henshaw, head of intermediary distribution at Wesleyan, said there has been an increase in demand for advice from people looking to avoid having to pay more tax on the estates they wish to pass on.

“With IHT receipts likely to remain elevated without any change to the regime, advisers will continue to play a critical role in helping families develop robust strategies that will support them and their loved ones.”