IHT investigations carried out by HM Revenue & Customs (HMRC) brought in £274m tax last year from estates that had underpaid, according to law firm Wilsons.
The figure was a four-year high with the average IHT investigation garnering £48,400 in outstanding tax.
The private client firm said the higher yield from IHT investigations was mainly due to the rise of do-it-yourself probates.
It said HMRC opened 5,658 investigations into IHT in 2019/20. The average yield from each case was £48,422 – a 22% increase from an average yield of £39,763 three years ago in 2016/17.
The law firm said HMRC had dedicated “huge resources” to investigating high net worth estates. Investigations into IHT typically relate to assets which have either not been declared or have been undervalued.
The average yield from IHT investigations has jumped partly because rising property prices have increased the size of estates being passed on to dependants on death, it added.
Partner Belinda Watson said: “HMRC will be very conscious that people will be using the impact of coronavirus on the economy to argue that asset values have fallen – they’ll be looking to challenge anything where the fall is too sharp to be credible.”
She added HMRC would also on the lookout for executors failing to declare gifts made by the deceased within seven years before the death, which remain liable to IHT until a full seven years have elapsed.
Watson also warned about the problems with do-it-yourself probate applications.
“If the amounts of IHT that have been evaded are significant then HMRC will consider bringing criminal charges and that could mean a custodial sentence. Individuals who have sought to mislead HMRC about the value of the assets they have inherited, have found this out the hard way,” she warned.