The number of families reclaiming overpaid inheritance tax (IHT) because of losses on property sales doubled last year as the housing market slowed, NFU Mutual has found.

Following a freedom of information request to HMRC, the financial advisory firm revealed that estates that successfully claimed overpaid IHT for losses on property sales increased from 5,070 in the year to end of April 2026 to 10,550 in the following year.

IHT is assessed on the value of a person’s estate on the date of death and the tax must normally be paid within six months. If, when the executors come to sell any property, shares or other qualifying investments, the price has fallen, they can reclaim the overpaid tax from HMRC.

The HMRC figures show a sharp jump in successful reclaims relating to property in the last tax year, underlining the slowing housing market, particularly in London and the South East, where families are more likely to pay IHT.

Estates in London and the South East paid £3.26bn in IHT during 2023/24, representing 46% of the total £7.03bn raised in that period.

This follows house prices in London dropping by 3.7% in the year to May 2026, according to Land Registry data, as sales take longer and sellers are asked to trim their asking prices.

Chartered financial planner at NFU Mutual, Sean McCann, stated: “These figures show that more people are waking up to the possibility that they could reclaim overpaid IHT. While the fall in property prices in London will have contributed to the increase in reclaims, in many cases, it will be the result of property having been overvalued on the IHT return or because of deterioration of the property between the death and subsequent sale.

“As more families get dragged into IHT net, it’s important they realise they can reclaim overpaid IHT. If you are reclaiming overpaid IHT following a fall in the value of shares or investments, all qualifying investments sold by the executor in the 12 months following death must be included in the claim, not just those that have fallen in value. If some have increased in value, this will reduce the amount of IHT that can be reclaimed.

“In these circumstances, it may be more advantageous for the executors to pass the shares or investments that have increased in value direct to the beneficiaries rather than sell them. This means you make a claim only for those shares that have fallen in value, ensuring you maximise the benefit.”

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