A freedom of information (FoI) request from NFU Mutual has revealed the number of estates reclaiming overpaid inheritance tax (IHT) doubled last year, as a result of a mismatch between property valuations for the purposes of IHT and property sale prices.
The number of estates which successfully reclaimed overpaid IHT jumped from 5,070 in the tax year ending April 2025 to 10,550 in 2025-2026. Market economics, over-valuation and the time it takes to administer probate all have a part to play in the discrepancy, according to NFU Mutual.
London and the south east are two areas where house prices have fallen over the last 12 months. HM Land Registry figures reveal house prices fell by 3.7% in London in the 12 months to May 2026 as sales are take longer and sellers trim asking prices. As a result, property which may have been valued higher at the point at which IHT was calculated is sold for less than the valuation.
The issue is most acute in areas where more estates are likely to fall into IHT thresholds: estates in London and the south east contributed £3.26 billion, or 46%, of the £7.03 billion IHT raised in the UK during 2023-24, according to HM Revenue & Customs (HMRC).
Sean McCann, chartered financial planner at NFU Mutual, said alongside falling prices there are issues with over-valuation on the IHT return and deterioration of the property to take into account once probate is complete, given the time estate administration takes. “As more families get dragged into inheritance tax net, it’s important they realise they can reclaim overpaid inheritance tax”, he said.
The FOI also shows that the number of successful claims made for losses on shares and other qualifying investments halved between 2023-2024 and 2024-2025 as stock markets remained buoyant.
Reminding firms of the requirements to submit claims for all shares or investments, regardless of whether they have increased or decreased in value, McCann suggested executors should “pass the shares or investments that have increased in value direct to the beneficiaries rather than sell them”.
He added: “This means you make a claim only for those shares that have fallen in value, ensuring you maximise the benefit.”
McCann concluded: “During times of market volatility, it’s important families check whether they can reclaim inheritance tax, in some circumstances it can amount to thousands of pounds.
“With pensions set to be included in the inheritance net from next April more families will be impacted, unfortunately they won’t be able to reclaim should the value of a pension fall after death.’’
