HMRC launched greater than 14,000 inheritance tax investigations since 2022, a Freedom of Data (FOI) request discovered. The info exhibits a pointy improve in instances.
HMRC has cracked down on underpaid inheritance tax (Picture: Getty)
The variety of households chased for inheritance tax has sharply risen lately, in accordance with a Freedom of Data (FOI) request. In line with knowledge obtained by way of an FOI request by NFU Mutual, the tax workplace has performed greater than 14,000 investigations since 2022. Throughout these investigations, HM Income and Customs (HMRC) would possibly suspect an property has underpaid inheritance tax after an individual has handed away. These investigations jumped from 3,163 in 2022/2023 to 4,200 in 2024/2025, a rise of 33%.
Something inherited over the £325,000 tax-free threshold faces a 40% levy. Nonetheless, a further £175,000 allowance is utilized when a house is handed right down to youngsters or grandchildren. The newest figures from HMRC present that IHT receipts collected between April 2025 and January 2026 jumped by £130 million in comparison with the identical interval within the earlier monetary yr. Sean McCann, chartered monetary planner at NFU Mutual, defined that HMRC can use a number of sources to find out the deceased’s monetary standing if it suspects IHT has been underpaid.
This could embody inspecting financial institution statements, revenue sources, and undisclosed belongings. “IHT stays probably the most feared and least understood taxes, with unspent pensions falling inside the inheritance tax web from 2027 and plenty of farms and companies from April 2026, increasingly households will discover themselves dragged into paying inheritance tax,” he mentioned.
McCann mentioned that HMRC leaves “no stone unturned” in the case of these investigations.
He added: “The income recovered by way of these investigations is critical, and the rising worth of belongings and the potential sums at stake would seem to justify HMRC growing the variety of instances they take a look at. The elevated stage of knowledge accessible to HMRC additionally permits them to be extra forensic and focused in nature.”
The Workplace for Funds Accountability has estimated that 9.5% of deaths may set off inheritance tax payments by 2029-30. This is able to mark a rise from solely 5.1% in 2022-23.
The inheritance tax nil-rate threshold has remained the identical since 2009. With inflation and the rising worth of properties and belongings, increasingly folks will face this tax when a cherished one dies.
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Making certain the right tax is paid is the accountability of the need’s executor. HMRC can pursue them straight if it discovers {that a} full tax invoice has not been paid.
Nonetheless, it has issued refunds for many who have overpaid IHT. In some circumstances, individuals who have overpaid get greater than 2% curiosity again. An evaluation of HMRC knowledge by The Telegraph confirmed that greater than 6,000 estates acquired refunds final yr, totalling greater than £300 million.
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