HMRC inheritance tax underpayment among wealthy individuals is suspected to have reached £392m in the year to 31 March 2026, a 14% increase on the £344m recorded the previous year, according to Money Marketing. For UK savers managing estates, SIPPs and intergenerational wealth transfers, the figures serve as a reminder that HMRC’s scrutiny of inheritance tax compliance is intensifying, not easing.
Why HMRC inheritance tax underpayment is rising up the agenda
The figures come from TWM Solicitors, whose deputy head of private client and partner, Duncan Mitchell-Innes, has been tracking HMRC’s enforcement focus in this area. TWM said HMRC was likely to maintain its focus on inheritance tax as more estates become liable for the levy. Recent reforms, which increase the potential tax bill for some families, are adding further pressure.
The direction of travel matters here. A 14% year-on-year rise in suspected underpayments is not a blip. It reflects a structural shift: more estates crossing IHT thresholds, partly due to frozen nil-rate bands and partly because accumulated wealth in property and pension assets has grown. For anyone in the accumulation phase or drawing down in retirement, understanding the current rules and their likely trajectory is an essential part of estate planning, not an afterthought.
The HMRC inheritance tax underpayment figure represents what the tax authority suspects, not what has been proven in full. That distinction matters legally, but it also illustrates how complex IHT compliance has become. Valuation disputes, the use of trusts, and the timing of gifts can all give rise to honest errors as well as deliberate avoidance, and HMRC will pursue both.
Defined outcome strategies gain ground among professional investors
Separately, research from WisdomTree offers a window into how professional investors across Europe are repositioning portfolios in response to uncertainty. A survey of 800 professional investors, conducted by Censuswide and covering around £4.3tn in assets, found that 80% of those familiar with defined outcome strategies expect allocations to rise over the next five years, with 22% anticipating a significant increase.
Currently, 55% of European professional investors use options-based exchange-traded funds or mutual funds. WisdomTree said demand was being driven by investors seeking greater certainty and control over outcomes. Around 30% of respondents highlighted improved behavioural discipline as a potential benefit, while 28% cited greater certainty of outcomes.
From a portfolio-construction standpoint, defined outcome strategies can play a useful role for those in or near drawdown, where sequence-of-returns risk is most acute. Capping the downside, even at the cost of some upside participation, appeals to investors whose primary objective is capital preservation over a five-to-ten-year horizon rather than maximising absolute returns.
That said, barriers remain. WisdomTree acknowledged product complexity, limited availability and difficulties explaining these strategies to clients as real obstacles to wider adoption. Education and clearer portfolio use cases would, the firm said, be important to further uptake. For DIY investors, the complexity risk deserves careful consideration before committing capital to structures that may behave very differently in stressed market conditions than in the scenarios used to illustrate them.
Auto-enrolment: enrolled is not the same as saving enough
One further observation from the day’s commentary deserves attention. Chris Eastwood, chief executive of Penfold, speaking to the Work and Pensions Committee inquiry into auto-enrolment contribution reform, noted that ‘auto-enrolment has been a success at getting people into pensions, but being enrolled is not the same as saving enough.’ For anyone reviewing their SIPP or workplace pension contribution levels, that gap between participation and adequacy is the central challenge for long-term retirement planning, and one that no amount of regulatory success in enrolment rates alone will close.
TWM Solicitors has flagged that HMRC’s focus on inheritance tax compliance is set to continue; for estate planning purposes, a review of valuations, trust structures and gifting records with a qualified adviser is the most direct response available to those with potentially liable estates. More detail on TWM Solicitors‘ private client work is available on their website.
