Another reason taxpayers may be missing out on IHT deductions, he said, is because they may not have revised their wills since the surcharge was introduced in 2017.
“Many individuals will have drafted their wills so that their assets are transferred to a discretionary trust and to qualify for the exemption it must be inherited by children or direct descendants.”
He added: “In addition, married couples will often bequeath their assets to their surviving spouse. Such transfers are usually not subject to inheritance tax and may result in the unused zero rate bracket being transferred to the surviving spouse. This means that it can potentially be used on their subsequent death and therefore costs are deferred to the treasury and claims are deferred.
There was also a £15 million gap between what HMRC expected to receive from “taper relief”, known as the seven-year rule. This is where gifts made within seven years of death are subject to IHT, but at a lower rate than the usual 40 percent.
HMRC is stepping up efforts to recover IHT from families it believes have underpaid charges following a pause in investigations during the pandemic.
In 2021-2022, HMRC seized £326 million from families through its compliance activities. As of 2019, more than 13,000 taxpayers have been subject to an IHT investigation.
HMRC said the actual cost of IHT lighting could differ from estimates for a variety of reasons, such as a reduced number of claimants, changes in the housing market and other economic conditions, or average claims diverging from expectations.
A spokesman for HMRC said: “Predicting the future cost of anything will always be a challenge. Differences between estimated and actual costs should not be attributed to one simple reason.”