Can I Reclaim Overpaid Inheritance Tax? Your Guide to Getting Money Back from HMRC

Belgravia Capital
May 31, 2025
3 min read

If you’ve paid an inheritance tax (IHT) bill and later discovered that the estate was overvalued or reliefs weren’t applied, you might be asking:

“Can I reclaim overpaid inheritance tax?”

The answer is: Yes - in many cases, HMRC allows you to claim a refund on IHT. But the rules are time-sensitive, form-heavy, and often misunderstood.

In this article, Belgravia Capital Wealth Management explains when you can reclaim inheritance tax, what evidence is needed, and how to make sure you don’t lose out on money that’s rightfully yours.

When Might You Overpay Inheritance Tax?

Inheritance tax is usually paid before probate is granted, based on valuations at the time of death. However, there are several reasons why you might end up paying more than necessary:

The value of assets dropped after death

For example, you paid IHT on a property or shares, and they were later sold for less than the probate value.

You later discover debts or liabilities

These should reduce the estate’s net value - and therefore the IHT bill.

You didn’t claim all available reliefs

Such as business relief, agricultural relief, or transferable nil-rate bands.

There was an error in the original valuation

Professional revaluation may reveal the estate was worth less than first thought.

What Are the Rules for Reclaiming Overpaid IHT?

HMRC allows you to reclaim IHT if:

There has been a genuine overpayment; and
You apply within the correct time limits.

Let’s look at two of the most common reclaim routes:

Reclaiming IHT on a Loss from Sale of Shares

If you sold quoted shares or securities within 12 months of death for less than the value used for probate, you may be able to reclaim the IHT on the loss.

Requirements:

The shares must have been included in the estate for IHT purposes.
They must be listed on a recognised stock exchange.
The sale must occur within 12 months of the date of death.
The reclaim must be made within 4 years from the end of the 12-month period.

Use HMRC Form:

IHT35

Reclaiming IHT on a Loss from Sale of Property or Land

If you sell a property or land from the estate within 4 years of death at a loss, you may be eligible for a refund on some of the IHT already paid.

Requirements:

The asset must have been included in the IHT calculation.
You must apply within 7 years of the date of death.
The sale price must be lower than the original probate value.

Use HMRC Form:

IHT38

Reclaiming IHT from Other Errors or Omissions

If you discover that:

Debts weren’t properly included
Reliefs weren’t applied
A valuation was mistakenly high

You can write to HMRC with updated estate information and request an amended IHT calculation.

Time limits vary, but typically you must claim within 4 years of the original tax due date.

How to Make a Claim for Overpaid IHT

Check which form applies:
- IHT35 – Loss on sale of shares
- IHT38 – Loss on sale of land/property
- Letter to HMRC – General claim for overpayment or error
Provide documentation:
- Original IHT calculation
- Details of the revised sale
- Supporting evidence (sale contracts, valuations, etc.)
Submit to:

HMRC – Inheritance Tax, BX9 1HT, United Kingdom

Claims are usually processed within 12 weeks, though more complex cases may take longer.

Important Notes and Pitfalls when claiming Overpaid Inheritance Tax

You can’t reclaim IHT just because market conditions changed after the 4-year or 12-month window.
Sales must be on the open market - not private transfers.
If multiple shares were sold, all qualifying sales must be included in the claim (you can’t cherry-pick losses).
You can’t reclaim IHT if the asset wasn’t taxed in the first place.

Can Executors Reclaim Overpaid Inheritance Tax?

Yes - the executor or administrator is responsible for making the claim. They can refund the money to the estate for redistribution to the beneficiaries.

Beneficiaries cannot make the claim directly, unless they were personally responsible for the IHT (e.g. on gifts or trusts).

How Belgravia Capital Wealth Management Can Help with Claiming back Overpaid IHT

We work with executors and families to:

Review and verify IHT calculations
Identify overpayments and missed reliefs
Coordinate updated valuations
Submit claims to HMRC efficiently and correctly
Liaise with solicitors and tax specialists

In many cases, we’ve helped clients reclaim thousands in overpaid IHT - funds that would otherwise have been lost.

Conclusion: Can You Reclaim Overpaid Inheritance Tax?

Yes - but only if you act within HMRC’s time limits and have the proper evidence.

Whether due to falling asset values or oversight during probate, reclaiming IHT can restore a meaningful sum to the estate and your family.

Need help checking if you’ve overpaid?