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HMRC has forced families to stump up an extra £1.36billion following investigations into underpaid inheritance tax over the past five years, new figures show.

Suspected errors, omissions or under-valuations of assets can prompt deeper scrutiny of an estate and lead to higher bills as well as interest on late payments and penalties.

'HMRC has substantial investigative powers and will check a range of sources to build a picture of the deceased individual’s financial affairs,' warns NFU Mutual, which obtained the figures on the money recovered via a Freedom of Information request.

The total inheritance tax collected reached a record of nearly £8.5billion in the last tax year – but the arrival of Andy Burnham as Prime Minister has led to speculation about an overhaul which would hit more estates.

Burnham has previously floated the idea of a 10 per cent 'death tax' on all estates to fund the social care system.

At present around 4 per cent of estates pay inheritance tax at 40 per cent on assets above a certain size, although that’s expected to rise when pensions are drawn into the levy from April 2027.

Inheritance tax: Investigations into underpaid bills have reaped £1.36bn in recent years

You need to be worth at least £325,000 if you are single, or £650,000 jointly if you are married, before becoming liable for death duties.

If you are passing on your home to direct descendants, that rises to £500,000 and £1million jointly. This is Money's guide to inheritance tax explains more.

The HMRC figures obtained by NFU Mutual show the amount of inheritance tax raised via investigations was £247million in 2024-25, which was down 13 per cent on the previous year.

But Sean McCann, chartered financial planner at NFU, says this doesn’t mean a change in tack from the authorities.

'Investigations can take months and occasionally years to complete, and therefore the £247m recovered in 2024-25 may be from inquiries opened in earlier years,' he said.

'The revenue recovered through these investigations is significant and the rising value of assets and the potential sums at stake would appear to justify HMRC spending more time looking at individual cases.'

He says HMRC launches investigations into the estates of deceased people where underpayment of inheritance tax is suspected, and as noted above it can look closely into someone's affairs.

McCann says HMRC might investigate the following areas of people's finances.

• Bank statements which can reveal income from undisclosed assets such as overseas property or investments.

• Life insurance premiums, which if not written in trust will be included in the taxable estate.

• Other insurance records which might cover jewellery, wine collections and other high value items omitted from IHT returns.

He adds: 'Insurance records can also highlight items that have been gifted more than seven years ago but the deceased continued to enjoy a benefit from, such as a valuable painting remaining in their home.

'This "reservation of benefit" can mean that the item is included in their inheritance tax calculation.'

Heather Rogers, This is Money's tax expert and the founder of Aston Accountancy, warns in our guide to paying inheritance tax to take care with property valuations.

'If you get the wrong valuation, or HMRC disagrees with your valuation, then expect a visit from the district valuer.'

She says if an asset like the family home is being sold it is less of a worry as the amount it fetches will be the value for the final inheritance tax account.

But if an asset like a property is going to be passed to a beneficiary, you should get a valuation by a surveyor.

Rogers says the level of penalty you might face after an investigation depends on the circumstances, but can be severe.

If inheritance tax is paid late then interest will also be due, plus further penalties for the delay, for example if you have no reasonable excuse.

You get six months, kicking off from the last day of the month after a loved one's death, to add up their assets, calculate what is owed and hand over any money due to the taxman.

After that HMRC charges interest of 4 per cent plus the Bank of England base rate, which is currently 3.75 per cent – so it levies 7.75 per cent right now.

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