Grieving families urged to check 1 rule as HMRC hits them with £3.1m | Personal Finance | Finance
Bereaved families are being urged to check a crucial inheritance tax rule after HMRC handed out £3.1million in penalties to estates that failed to meet filing and payment deadlines. Freedom of Information (FoI) data reveals that HMRC imposed late-filing charges on the executors of 5,200 estates during 2024-25, extracting £3.1million in penalties. This marks a 35% jump compared with 2020-21, when 3,850 families were penalised to the tune of £1.8million.
Experts are now warning executors that overlooking just one key requirement could prove costly at an already difficult time. When someone dies, inheritance tax must usually be paid within six months of the end of the month in which the death occurred. While the estate’s representatives are responsible for handling the process, many families are unaware of the strict timetable until they begin dealing with probate.
Missing the deadline can trigger penalties and interest charges from HMRC, adding to the financial burden facing relatives who are already navigating complex paperwork. The warning comes as official figures show HMRC collected millions of pounds through inheritance tax penalties over recent years, highlighting the growing number of families being caught out by the rules.
Tax specialists quoted in GB News say delays often occur because executors are waiting for property valuations, struggling to gather information about assets or simply unaware of the deadlines involved.
Inheritance tax has become an increasingly sensitive issue as more estates are dragged into the system. Frozen thresholds and rising property values have pushed greater numbers of families into the tax net, while HMRC has also stepped up its scrutiny of estates.
Professionals are urging anyone acting as an executor to begin gathering information as early as possible and seek advice if they are unsure about their obligations.
They warn that while families are focused on coping with a bereavement, HMRC’s deadlines continue to apply, meaning even genuine mistakes can result in additional costs.
HMRC has rejected suggestions that penalties will become more widespread next year, with a spokesman stating it is “simply not true” that fines will increase.
The spokesman said: “The reality is we reduced reporting requirements during this period for most non-taxpaying estates.
“We’re constantly looking at ways to simplify returns, and the Government is investing £52million to simplify and digitalise our inheritance tax service to make the process quicker and easier.”
