{"id":898014,"date":"2026-09-19T18:18:14","date_gmt":"2026-09-19T18:18:14","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/898014\/"},"modified":"2026-09-19T18:18:14","modified_gmt":"2026-09-19T18:18:14","slug":"hmrc-suspects-up-to-392m-of-inheritance-tax-has-been-underpaid-by-wealthy-individuals","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/898014\/","title":{"rendered":"HMRC suspects up to \u00a3392m of Inheritance Tax has been underpaid by wealthy individuals"},"content":{"rendered":"

HMRC suspects that wealthy individuals may have underpaid Inheritance Tax (IHT) by as much as \u00a3392m* in the last year (as of 31 March 2026) says TWM Solicitors<\/a>, a leading private wealth and family law firm.<\/p>\n

The figure for suspected underpayment of IHT is up 14% on the \u00a3344m figure a year ago.<\/p>\n

With more estates becoming liable to IHT and recent reforms expected to increase future tax bills for some families, HMRC is likely to remain focused on identifying underpaid tax.<\/p>\n

Duncan Mitchell-Innes, Deputy Head of Private Client and Partner at TWM, says:<\/p>\n

\u201cThe IHT rules can be complicated and, for executors trying to complete the IHT return without professional help, there is scope for misunderstanding or not being aware of the rules, leading to an inadvertent underpayment of IHT.\u201d<\/p>\n

Duncan Mitchell-Innes warns that where HMRC identifies an underpayment of IHT, executors or personal representatives can face significant interest charges and, depending on the circumstances, financial penalties.<\/p>\n

Duncan adds: \u201cHMRC\u2019s increasingly sophisticated data analytics are making it easier for them to spot underpayment.\u201d<\/p>\n

Some of the issues HMRC looks for that might indicate IHT has been underpaid<\/p>\n

Valuable chattels, such as jewellery, watches and paintings, that were insured by the deceased but are missing from the probate.<\/p>\n

Artworks that have an artificially low value placed on them. HMRC has a specialist Shares and Assets Valuation Office that can help it double-check valuations.<\/p>\n

Bank records of the deceased show transfers to overseas bank accounts or cryptocurrency accounts but there is no mention of these assets in the probate.<\/p>\n

Businesses qualifying for Business Property Relief may receive relief from IHT up to the applicable limits. HMRC may scrutinise businesses holding unusually high levels of cash on their balance sheet. HMRC may argue that the cash has been deliberately \u2018parked\u2019 in the business so that it is exempt from IHT.<\/p>\n

The probate misses assets that the deceased\u2019s self-assessment tax returns suggest existed. For example, the tax return declares rental income from a property or dividend income from shares that have not been declared in the probate.<\/p>\n

Were gifts really made more than seven years before death? If they were actually made less than seven years before the donor died then IHT may be due on it.<\/p>\n

If an asset has been gifted but the deceased was still using the asset. For example, the deceased gifted a holiday home to his children but was still using it himself. This is called a \u2018gift with reservation of benefit\u2019 and will increase the IHT bill.<\/p>\n

Has the property that has been left been properly valued? HMRC may:<\/p>\n

Check whether the property is subsequently sold at a much higher price than it was valued in the probate.<\/p>\n

Look for planning permission that has already been granted on the property which may increase its value but is not reflected in the IHT valuation.<\/p>\n

Be suspicious if the property is valued at a lower price than that of surrounding comparable properties.<\/p>\n

Previous TWM research found that HMRC is paying increasing attention to property valuations, with referrals to the Valuation Office Agency (VOA) rising 23.5% from 11,845 to 14,631 in the 12 months to September 2025.<\/p>\n

Duncan concludes: \u201cExecutors should make sure they obtain robust professional valuations for significant assets and keep detailed records supporting the figures submitted to HMRC. Taking advice early can help avoid lengthy investigations, penalties and interest.\u201d<\/p>\n

Value of IHT that HMRC suspects that wealthy individuals have underpaid<\/p>\n

\"\"<\/p>\n

*The maximum potential IHT owed by wealthy individual taxpayers before HMRC completes its investigations.<\/p>\n

Wealthy individuals are defined by HMRC as having an income of \u00a3200,000 or more or assets worth more than \u00a32m in any of the last three years.<\/p>\n","protected":false},"excerpt":{"rendered":"HMRC suspects that wealthy individuals may have underpaid Inheritance Tax (IHT) by as much as \u00a3392m* in the…\n","protected":false},"author":2,"featured_media":898015,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[64,63,99,186,184,185],"class_list":["post-898014","post","type-post","status-publish","format-standard","has-post-thumbnail","category-personal-finance","tag-au","tag-australia","tag-business","tag-finance","tag-personal-finance","tag-personalfinance"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/898014","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=898014"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/898014\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/898015"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=898014"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=898014"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=898014"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}