HMRC inheritance tax investigations surge 37% as treasury seeks to plug revenue gap

The number of investigations in the IHT tax, which was launched by HM Revenue & Customs by more than a third of last year, increased the government’s efforts to take measures from treasury revenues and increase treasury revenues.

New figures obtained by requesting freedom of information by accounting company, Price Billy, revealed that HMRC opened 4,171 official IHT investigations in the year to April 2025, an increase of 3,028 in the previous year – a 37 % jump.

The increase on the renewed focus of the tax authority confirms because it seeks to recover what you think is important amounts of money by abuse or lack of evaluation of real estate. HMRC regained a record 8.2 billion pounds in the inheritance tax last year alone, partly driven by frozen tax thresholds, high real estate prices, and increasing asset values.

The perpetrators responsible for real estate management must provide IHT’s return within 12 months of death, although any due tax must be paid within six months to avoid interest benefit – it is imposed on the basis of 8.25 %. Where HMRC suspected that the property has been estimated – whether through innocent supervision or deliberate evasion – can lead to an investigation.

Experts say the investigations are often paid to reduce the value of property, deleted assets, or complex gifts that fall under the “seven -year base”, which allows gifts to escape from IHT if the donor lives for at least seven years after granting them.

“The tax office has large powers at his disposal,” said Nikita Cooper, tax partner in Price Billy. “We have seen a noticeable increase in the number of cases where HMRC uses detailed data – including bank data, investment date, and even foreign currency transactions – to check off more closely.”

Damian Bloom, a partner in the law office, Taylor Wesyg, said that the rise in investigations was partially driven by greater access to advanced data and analyzes. He added: “Since HMRC adopts more artificial intelligence tools, we expect this trend to accelerate.”

IHT fees are imposed by 40 % on the value of the property above the metal range of 325,000 pounds. For real estate that includes the house that was transferred to a child or grandson, a residence squad worth 175,000 pounds may be applied at 175,000 pounds, according to less than 2 million pounds. Together, the couple or civilian partners can transfer up to one million pounds of tax exempted. These thresholds were frozen at least 2030.

More families now find themselves in the IHT network, especially since property values ​​and pensions have risen over the past decade. As of April 2027, the rules will increase, with unused pension utensils unused in the taxable estate – as well as both obligations and compliance risks.

“When families and advisers adapt to these new rules, we will likely see more mistakes – or perfected errors – are more scrutiny from HMRC,” said Fiona Fini, a partner in Blake Rothnberg.

She added that although many people believe that the regime is unfair, especially amid high asset enlargement, attempts to reduce tax obligations – however, often provoke a close examination.

HMRC insists that the “vast majority” of real estate pays the correct tax and that the investigations are open only when there is evidence of payment. “The cases can range from real errors to deliberate attempts to evade taxes,” said a spokesman, adding that those who differ with HMRC evaluation can resume.

For families that move in the management of bereavement and real estate management, the message is clear: it can reduce an accurate and transparent asset assessment – and early experts – the risk of falling into the IHT probe.