In short
A flat 10% levy on every estate, replacing inheritance tax, is being discussed ahead of the 28 October 2026 Budget. It is not Government policy and the Government says it has “no plans” for it. Executors should work to today’s rules: IHT is still normally due within six months of death, and an empty probate property keeps costing the estate money.
If you’re currently going through probate, you’ve probably already got your head around inheritance tax: the nil-rate bands, the six-month payment deadline, and perhaps the Direct Payment Scheme. So it’s worth knowing that inheritance tax itself is part of a live policy debate ahead of the Budget on 28 October 2026. The proposal is to scrap inheritance tax altogether and replace it with a flat 10% levy on every estate passed on after death, an idea Prime Minister Andy Burnham supported when he was Health Secretary.
Nothing has been decided. The Government’s public position is that it has “no plans” to introduce this. But the idea keeps resurfacing in Budget speculation, and it would touch every estate going through probate, not just the small minority that pay inheritance tax today. That makes it worth understanding, especially if you’re part-way through administering an estate right now.
What’s actually being proposed
The idea is a flat 10% charge on the value of an estate when someone dies, replacing the current inheritance tax system entirely. Today’s inheritance tax only applies once an estate clears the nil-rate band: £325,000, or up to £500,000 with the residence nil-rate band when a family home passes to direct descendants. A flat levy with no threshold would apply to every estate, however modest.
The stated purpose is to help fund a National Care Service, estimated to cost £18.7 billion a year, and to reduce the number of families forced to sell a home to pay for care in later life.
Separately, the Treasury is reportedly modelling changes to capital gains tax, including bringing CGT rates closer to income tax rates. That matters for probate property because CGT can already apply if a property sells for more than its value at the date of death, as we explain in our guide to capital gains tax on inherited property.
Why this hasn’t gone anywhere yet
According to the Chartered Institute of Taxation, the adult social care review this proposal would sit alongside isn’t expected to report until summer 2027, well after this year’s Budget. That timeline alone suggests a wholesale replacement of inheritance tax is not imminent, and the Government has said it has no plans for it.
For families dealing with probate now, the practical point is simple: this is not something you need to act on before 28 October. It is worth keeping an eye on, though, because an idea backed in the past by people now in senior Government roles doesn’t disappear just because it has been left out of one Budget.
What it would mean if it ever happened
For estates that currently fall below the inheritance tax threshold and pay nothing, which is the large majority, a flat 10% levy would be a major change. A tax bill of £0 could become a bill for a tenth of the entire estate, family home included.
For larger estates already paying 40% above the threshold, a flat 10% on the whole estate could, depending on how it was designed, work out lower than what they pay today. That tension is exactly why proposals like this draw strong opposition from several directions before they ever reach a Budget speech.
What executors should focus on right now
Whatever happens in October, the pressures we see from executors every week haven’t changed, and these are the ones within your control.
Inheritance tax is still due within six months
Under the current rules, inheritance tax is normally due within six months of death, often before probate has even been granted. When the estate’s money is tied up in the property, this is where families come under the most pressure. It’s why many executors choose a fast cash sale to release funds quickly rather than waiting for a traditional buyer and chain.
An empty probate property keeps costing money
The longer a property sits empty while a family waits to see what happens with tax policy, the more it costs. Standard insurance cover can lapse within 30 to 60 days of a property standing empty, the council tax exemption has a firm end date, and maintenance doesn’t pause for a Budget announcement.
The valuation still has to be right
Under any tax system, HMRC bases the liability on the property’s value at the date of death. Getting that valuation right matters, and if the sale price later comes in lower, you may be able to claim some tax back.
The honest summary
A flat “death levy” replacing inheritance tax is a real idea being discussed by policymakers, not an invented scare story. But it is not Government policy, it isn’t expected in this Budget, and the review it depends on doesn’t report until 2027 at the earliest. Plan around the rules as they are today.
Under any version of the tax system, an inherited property sitting empty and unsold is one of the biggest risks to an estate’s value, in cost, in delay and in family stress.
Need to release funds from a probate property quickly?
A fast, certain cash sale can take the pressure off an inheritance tax deadline or a property that’s costing money while it sits empty. Get a free, no-obligation cash offer with a free probate solicitor consultation, no fees and no chain. Call 020 3633 9458, Monday to Sunday, 8am to midnight.
Frequently asked questions
Is inheritance tax being replaced by a 10% levy?
No. It is a proposal that has been discussed, not Government policy. The Government has said it has no plans to introduce it, and the social care review it is linked to is not expected to report until summer 2027.
Should I delay selling a probate property until after the Budget?
For most executors, no. Inheritance tax is normally due within six months of death under the current rules, and an empty property carries ongoing costs for insurance, council tax and upkeep while you wait.
Would a flat 10% levy mean more or less tax for my family?
It depends on the size of the estate. Estates below today’s nil-rate band (£325,000, or up to £500,000 with the residence nil-rate band) pay nothing now but would pay 10% under a flat levy. Larger estates could pay less than today’s 40% rate above the threshold, depending on how any scheme was designed.