The number of families reclaiming overpaid inheritance tax because of losses on property sales doubled last year, figures from NFU Mutual have shown.
A Freedom of Information request to HM Revenue & Customs showed the number of estates that successfully claimed overpaid IHT for losses on property sales doubled from 5,070 in the tax year ended April 2025 to 10,550 in 2025/2026.
Land registry figures show that house prices fell by 3.7% in London in the 12 months to May 2026 as sales are taking longer and sellers are having to reduce their asking prices. Estates in London and the southeast paid £3.26 billion, or 46%, of the £7.03 billion inheritance tax raised in the UK during 2023/24.
Inheritance tax is assessed on the value of a person’s estate on the date of death and the tax must normally be paid within six months. If, when the executors come to sell the property, the price has fallen they can reclaim overpaid tax from HMRC. The tax refund is not automatic and has to be proactively reclaimed.
Sean McCann, chartered financial planner at NFU Mutual, said: “A large inheritance tax bill can be a nasty shock for grieving families. These figures show that more people are waking up to the possibility that they could reclaim overpaid inheritance tax.
“While the fall in property prices in London will have contributed to the increase in reclaims, in many cases, it will be the result of property having been overvalued on the inheritance tax return or because of deterioration of the property between the death and subsequent sale.”
The FOI also showed that the number of successful claims made for losses on shares and other qualifying investments halved between 2023/24 and 2024/25 as stock markets remained buoyant.
McCann added: “As more families get dragged into inheritance tax net, it’s important they realise they can reclaim overpaid inheritance tax. If you are reclaiming overpaid IHT following a fall in the value of shares or investments, all qualifying investments sold by the executor in the 12 months following death must be included in the claim, not just those that have fallen in value. If some have increased in value, this will reduce the amount of inheritance tax that can be reclaimed.
“In these circumstances, it may be more advantageous for the executors to pass the shares or investments that have increased in value direct to the beneficiaries rather than sell them. This means you make a claim only for those shares that have fallen in value, ensuring you maximise the benefit.”
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