HM Revenue & Customs recovered £246 million in underpaid inheritance tax last year as enforcement activity intensified, data reveals.
Investigations into inheritance tax rose to 3,977 in the financial year to April 2025, up from 3,793 the previous year, according to analysis by TWM Solicitors. HMRC is increasingly using data-matching tools – including AI systems – alongside Land Registry records and mapping data to identify discrepancies in estate returns.
Property values driving more estates into IHT net
The sharp rise in inheritance tax receipts – up more than 61 percent to £8.3 billion since 2020 – has increased HMRC’s focus on potential underpayment. Rising property and asset values, combined with frozen tax thresholds, continue to push more estates into the inheritance tax net.
The inheritance tax nil-rate band has remained at £325,000 since April 2009. Before then, the threshold increased almost every year from 1986 to 2009. No increases are currently planned.
Penalties can run to tens of thousands
David Lunn, partner in the private client team at TWM Solicitors, said: “HMRC’s investigations are becoming increasingly complex, particularly when it comes to residential property. With tax rules growing ever more complicated, and the IHT net widening with each Budget, people need to ensure they obtain proper advice. Penalties can run into tens of thousands of pounds.”
He added: “The IHT threshold was originally set so that only families with significant assets would pay the tax. But after years of being frozen, even families with a relatively modest home are now finding they owe IHT.”
An HMRC spokesperson said the majority of people pay the correct amount. “In cases where it is suspected someone has not, investigations can be opened to address issues and ensure the system remains fair,” they added.
For landlords with property portfolios, the data is a reminder that estate planning and accurate valuations have become essential – not optional – parts of investment strategy.
Editor’s view
The combination of frozen thresholds and rising property values means more landlord estates are exposed to IHT than ever before. With HMRC using increasingly sophisticated tools to identify undervaluations, this is no longer a risk that can be deferred indefinitely.
Author: Editorial Team – UK landlord & buy-to-let news, policy, and finance
Published: 9 February 2026
Sources: TWM Solicitors, HMRC
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