HMRC chases 14,000 grieving families for inheritance tax | Personal Finance | Finance
The number of families chased for inheritance tax has sharply risen in recent years, according to a Freedom of Information (FOI) request. According to data obtained through an FOI request by NFU Mutual, the tax office has conducted more than 14,000 investigations since 2022. During these investigations, HM Revenue and Customs (HMRC) might suspect an estate has underpaid inheritance tax after a person has passed away. These investigations jumped from 3,163 in 2022/2023 to 4,200 in 2024/2025, an increase of 33%.
Anything inherited over the £325,000 tax-free threshold faces a 40% levy. However, an additional £175,000 allowance is applied when a home is passed down to children or grandchildren. The latest figures from HMRC show that IHT receipts collected between April 2025 and January 2026 jumped by £130 million compared to the same period in the previous financial year. Sean McCann, chartered financial planner at NFU Mutual, explained that HMRC can use multiple sources to determine the deceased’s financial standing if it suspects IHT has been underpaid.
He added: “The revenue recovered through these investigations is significant, and the rising value of assets and the potential sums at stake would appear to justify HMRC increasing the number of cases they look at. The increased level of information available to HMRC also allows them to be more forensic and targeted in nature.”
An HMRC spokesperson said: “Most people pay the correct amount of inheritance tax. In cases where it is suspected someone has not, investigations can be opened to address issues and ensure the system remains fair.”
The Office for Budget Responsibility has estimated that 9.5% of deaths could trigger inheritance tax bills by 2029-30. This would mark an increase from only 5.1% in 2022-23.
The inheritance tax nil-rate threshold has remained the same since 2009. With inflation and the rising value of properties and assets, more and more people will face this tax when a loved one dies.
Ensuring the correct tax is paid is the responsibility of the will’s executor. HMRC can pursue them directly if it discovers that a full tax bill has not been paid.
However, it has issued refunds for those who have overpaid IHT. In some circumstances, people who have overpaid get more than 2% interest back. An analysis of HMRC data by The Telegraph showed that more than 6,000 estates received refunds last year, totalling more than £300 million.
