Disputes
HMRC (His Majesty's Revenue and Customs) imposed 35% more penalties for late inheritance tax returns in the tax year 2024-25 compared with five years earlier, according to government data released by a law firm on 6 June 2026. The data covers the five-year period since the pandemic and reveals a sustained and escalating enforcement posture by the tax authority on estate administration timelines. Inheritance tax (IHT) — a UK tax charged on the estate of a deceased person above the nil-rate threshold — requires executors (those appointed to administer an estate) to file returns within a statutory deadline. Penalties are imposed where those deadlines are missed. The 35% surge in penalty volume over five years indicates both a rising number of taxable estates (driven by property price inflation and the frozen nil-rate band) and increasingly active enforcement by HMRC. The data, released by a law firm, signals a structural shift in HMRC's approach to IHT compliance. Executors and personal representatives — often advised by private client solicitors — are facing greater penalty risk in a period when estate complexity has also increased, partly due to the government's recent moves to bring pensions and other assets within the IHT regime.
Why this matters
A 35% increase in HMRC IHT penalty enforcement is commercially meaningful for private client and tax dispute practices. Rising penalty volume creates demand for advisory work on estate administration compliance, penalty mitigation (making applications to HMRC to reduce or waive penalties), and tax tribunal appeals where penalties are contested. The frozen nil-rate band and rising property values have expanded the pool of taxable estates, so penalty exposure is widening across a growing client base. Tax dispute and private client teams will see sustained work as executors seek to manage HMRC interactions more carefully.
On the Ground
A trainee working on an IHT enforcement matter would assist with chronology preparation of the estate administration timeline to identify where the breach occurred, compiling the witness statement bundle for any tribunal appeal, and preparing costs schedules for the client. Researching the penalty mitigation framework and drafting initial correspondence to HMRC requesting reduction or suspension of penalties would also be early-stage tasks.
Interview prep
Question you might get
“What grounds would an executor have to challenge an HMRC inheritance tax penalty, and what is the tribunal route for contesting it?”
Sign up free to see the full answer
A model answer you can lift into an interview — how to frame this story for a partner.
Sign up freeMy notes
saved