Overview
- Freedom of Information data shows HMRC imposed late‑filing penalties on the executors of 5,200 estates during 2024-25, collecting £3.1 million and averaging about £596 per case.
- Late‑filing charges start at £100 and escalate over time, reaching up to £3,000 for returns more than 12 months overdue.
- Lawyers and wealth managers say the IHT400 form is a major cause of delay, with 122 questions and more than 30 supplemental schedules sometimes required to complete an estate return.
- Advisers warn that pension death benefits reported to move further into the inheritance tax regime from April could increase the number of estates needing returns and raise the risk of further penalties.
- HMRC says it has cut reporting requirements for many non‑taxpaying estates and that the government is investing £52 million to simplify and digitalise IHT, while frozen £325,000 tax‑free thresholds since 2009 have steadily pulled more modest estates into the system.