HMRC warns families face £3,000 fines after sending form 'late'

A growing numbers of taxpayers are being stung by the levy as rocketing house prices drive up the value of estates, it has been urgently warned.

Thousands of grieving families have been fined up to £3,000 by HMRC for inheritance tax delays. A growing numbers of taxpayers are being stung by the levy as rocketing house prices drive up the value of estates, it has been urgently warned.

Nearly 5,000 bereaved families were fined thousands of pounds for sending inheritance tax (IHT) forms late last year. During the 2023-2024 tax year, the executors of 4,865 estates were hit with penalties up to £3,000 for filing documents late, figures released under Freedom of Information rules show.

Growing numbers of taxpayers are being stung by the levy as rocketing house prices drive up the value of estates. IHT receipts hit £7.5bn between April 2023 and March 2024, new figures released in the Telegraph newspaper have revealed.

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This is up from 4,330 in 2022-2023 and 3,447 in 2021-2022. Laura Walkley, a partner at TWM solicitors, said: “Dealing with IHT can be a huge task and we’re increasingly seeing banks being uncooperative. That’s leading to huge delays and unfortunately to fines for families.”

In 2018, several financial institutions signed up to a “death notification service,” which allows families to notify organisations of a person’s death all at the same time. Mike Hodges, a partner at tax firm Saffery, told the Telegraph: “From personal experience having acted as executor on two small estates in my own family over the last couple of years, and even as a tax professional, I know the whole process is really quite daunting.

He said: “For a lay person I would imagine it is impenetrable. The number of different HMRC forms, even in very straightforward situations, and the fact that it is a paper process don’t help.” An HMRC spokesman said: “We’re committed to helping customers file and pay the tax they owe, on time. We charge penalties to encourage customers to meet their obligations, while acting as a sanction for those who don’t.”