HMRC Intensifies Inheritance Tax Crackdown with 14,000 Family Investigations
HM Revenue and Customs has launched a major investigation targeting 14,000 bereaved families across the United Kingdom as part of a significant crackdown on underpaid inheritance tax. The tax authority is utilizing what experts describe as "substantial investigatory powers" to examine potential discrepancies in estate valuations and tax payments.
Sharp Increase in Inheritance Tax Probes
Recent data reveals a dramatic escalation in HMRC's inheritance tax enforcement activities. During the first nine months of the current fiscal year, HMRC initiated 3,636 investigations into inheritance tax matters – representing an increase of nearly 1,000 cases compared to the same period last year.
Since the 2022-2023 tax year, HMRC has maintained an aggressive investigation schedule, opening a total of 14,027 inheritance tax investigations by the conclusion of 2025. Currently, approximately 1,800 investigations remain ongoing, with thirteen of these cases approaching their fourth year of examination.
Substantial Investigatory Powers Deployed
Sean McCann, a chartered financial planner at NFU Mutual, has highlighted the extensive authority HMRC possesses when investigating suspected inheritance tax underpayments. "HMRC has substantial investigatory powers when it suspects that inheritance tax has been underpaid," McCann explained.
He detailed that these powers include comprehensive analysis of bank statements to identify income patterns that might indicate undisclosed assets. "This can include analysing bank statements to identify income which may suggest the existence of undisclosed assets, such as investments or property or significant foreign currency transactions," McCann stated.
Extended Timeframe for Investigations
While inheritance tax typically must be paid within six months following a death, HMRC maintains authority to investigate potential underpayments for a significantly longer period. When the tax authority suspects inheritance tax has been underpaid, investigators can examine estate valuations and transactions dating back as far as twenty years.
Financial publication MoneyWeek reports that HMRC investigations into families suspected of underpaying inheritance tax have surged by forty-one percent over the past twelve months. This increase coincides with rising estate values and growing inheritance tax revenues collected annually by the government.
HMRC's Review Process and Official Statement
When an estate is reported to HMRC for inheritance tax purposes, officials conduct thorough reviews to verify accuracy and completeness of all submitted information. Investigations are typically initiated when estate details appear unusual or involve particularly complex financial transfers and arrangements.
An HMRC spokesperson addressed the investigation program, stating: "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 data regarding these investigations was obtained through Freedom of Information requests, providing unprecedented insight into the scale of HMRC's inheritance tax enforcement activities. As estate values continue to rise across the UK, financial experts anticipate that inheritance tax investigations will remain a priority area for HMRC compliance efforts.
