HMRC inheritance tax investigations reach six‑year high – report

HM Revenue & Customs (HMRC) in the UK initiated 4,940 formal inheritance tax (IHT) enquiries in 2025/26, according to data obtained by chartered accountancy (CA) practice Price Bailey.

The figure represents an 18% increase compared to the previous year and the highest figure in six years.

Price Bailey says HMRC can open a formal enquiry when it believes that an IHT return may be wrong or incomplete.

It gives the department power to request documents, valuations, correspondence and explanations from executors or advisers.

In 2025/26, HMRC’s risk assessors referred 4,965 IHT returns to its compliance team, the highest level in five years, according to the data.

Price Bailey also noted a steady drop in the proportion of audited IHT returns that actually require changes.

In 2025/26, 40% of referred compliance checks resulted in changes, down from 45% in 2024/25 and below pandemic‑era levels.

Price Bailey director Nikita Cooper said: “HMRC is coming under increasing pressure to clamp down on non compliance and boost the tax take.

“IHT was historically a very small component of HMRC’s overall revenues, but many more estates are being caught in the tax net every year, so it is becoming a higher priority for HMRC.

“For taxpayers, a formal enquiry can mean months of additional work at a time of bereavement. The process can entail providing detailed evidence of asset values, lifetime gifts and relief claims.

“Crucially, many formal enquiries do not lead to any additional tax, but they still impose a significant administrative and emotional burden on families who have already complied with the rules.”

Price Bailey added that IHT returns are still filed on paper and processed manually, with only limited data digitised, meaning HMRC does not hold the information in a format suitable for advanced analytics or AI‑driven risk models.

The company also noted that staff figures in HMRC’s Customer Compliance Group have grown in recent years.