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Home |Latest news |HMRC collected £1.39 billion in unpaid inheritance tax in last five years, data shows

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HMRC collected £1.39 billion in unpaid inheritance tax in last five years, data shows

June 17 2024

Data published recently by HMRC has shown that it collected £1.39 billion in unpaid inheritance tax (IHT) in the last five years.

According to the figures, HMRC recovered £285 million in unpaid IHT in the last tax year. The data also revealed that, since 2019, HMRC has initiated nearly 20,000 investigations into deceased individuals' estates where underpayment of IHT was suspected.

When a person dies IHT becomes due on their estate. IHT can also fall due on some lifetime gifts but most are ignored providing the donor survives for seven years after the gift.

The rate of tax on death is 40% and 20% on lifetime transfers where chargeable. Currently, the first £325,000 is chargeable to IHT at 0% and this is known as the nil-rate band.

Sean McCann, Financial Planner at insurer NFU Mutual, said: 'HMRC leaves no stone unturned in these investigations. For example, they will look at outgoings such as gifts made in the seven years before death, or premiums for life insurance policies which if not written in trust will form part of the taxable estate.

'In addition, the interest rate you pay on overdue inheritance tax stands at 7.75%, which is the highest rate for 30 years, and can add a significant amount to the bill.'

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