The British inheritance tax system has a unique cruelty that is rarely addressed in an open manner. Families must pay the tax within six months of a person’s passing, often before probate is even granted, before the estate is fully administered, and occasionally before the house has been sold or the accounts have been properly settled. The funds must reach HMRC on schedule. The wait for a refund can then take months if it turns out that an excessive amount was paid. For Albert Temperton, it was more than two years.
After his father passed away and the estate’s inheritance tax return was filed with HMRC in March 2024, an overpayment of about £12,000 was discovered and repaid to the family. That sum is not insignificant. For those dealing with the already significant financial and administrative burden of bereavement, this type of money is important. Nevertheless, the reimbursement was still pending over two years later. The Times took up the case and has been covering HMRC’s inheritance tax backlog more frequently as the scope of the issue has grown more difficult to overlook.
This structural issue is easy to comprehend. Early in 2026, HMRC received £780 million in inheritance tax receipts in a single month, the second-highest amount ever recorded. Forecasts indicate that the annual total will surpass £9 billion in 2025 and 2026. Due in part to frozen thresholds and rising property values, as well as the ongoing expansion of regulations, more estates than ever before are being subject to inheritance tax. Since 2009, the nil rate band has been at £325,000. In England today, the average house is valued at about £290,000. The math has gotten harder to avoid for anyone with savings, a pension, or modest assets in addition to real estate.
In other words, the system is making more money than it has in the past. The processing of the paperwork that moves in the opposite direction is what it has not kept up with. The refund procedure uses channels that haven’t been updated to handle the current volume when an estate is overcharged—for example, because asset values change after death. After all, a property sells for less than probate value, or because reliefs are applied late. Executors fill out the appropriate paperwork, wait the recommended amounts of time, and then end up in a line with no end in sight.
Temperton’s case is especially noteworthy because he followed all the right procedures. As required, the inheritance tax was paid on schedule. The return was correctly filed. The overpayment was found and turned in. It doesn’t seem that the six-month payment deadline that HMRC strictly enforces works in reverse. A system that can penalize late payments but provides no comparable accountability for late refunds has a certain irony, and it’s difficult to ignore the fact that this asymmetry always goes one way.
The number of families waiting in comparable circumstances is still unknown. HMRC does not provide detailed information about average processing times for IHT overpayment claims or outstanding inheritance tax refunds. Situations such as Albert Temperton’s are not unique. A bereaved family, properly filed paperwork, and a refund that arrived long after it should have—if at all—have all been featured in The Times in recent years. The more general question is whether the machinery designed to process inheritance tax receipts can truly handle the flow it is currently receiving, as inheritance tax receipts continue to rise and more common estates are caught by a threshold that hasn’t moved in fifteen years.
