Grieving families are facing a surge in investigations from HM Revenue & Customs amid a major clampdown on underpaid inheritance tax.

The number of probes launched by the taxman has soared by more than a third in just a year, fuelling concern that more estates are being dragged into disputes over the hated 40% duty.

Figures obtained under a Freedom of Information request by accountants Price Bailey reveal HMRC opened 4,171 formal investigations into inheritance tax (IHT) returns in the year to April - up from 3,028 the year before.

It comes as the Government steps up its war on tax avoidance to plug holes in the nation's finances, with HMRC accused of taking an increasingly aggressive stance.

Once someone dies, their executor must submit a valuation of the estate - covering everything from property and savings to antiques, jewellery and even furniture.

If the estate is liable for IHT, a return must be submitted within 12 months. But the tax bill must be settled within six months or families face punishing interest charges currently running at 8.25 per cent.

If HMRC suspects the estate has been undervalued - whether through error or deliberate omission - it has sweeping powers to investigate. These include demanding access to bank statements, investments and even foreign currency transactions.

Nikita Cooper of Price Bailey said: "HMRC is coming under increasing pressure to clamp down on non-compliance and boost the tax take as the government seeks to balance fiscal responsibility with economic growth."

Lawyers say the rise in investigations is being driven by growing access to data and the looming spectre of artificial intelligence.

Damian Bloom, of the law firm Taylor Wessing, told the : "I think the biggest driver is the increased availability of data for HMRC and this will be accelerated with increased adoption of artificial intelligence."

HMRC can trigger an investigation in a number of ways - from queries over property valuations to suspicion that families have wrongly exploited the "seven-year rule", which allows gifts to escape IHT if the donor survives for at least seven years after giving them.

Where underpayment is confirmed, the tax office issues a formal "amendment" and demands the difference, plus interest.

Inheritance tax is levied at 40% on estates worth more than £325,000. However, a further £175,000 allowance can be applied when the family home is passed on to a direct descendant, provided the estate is valued at under £2 million.

Together, married couples or civil partners can therefore pass on up to £1 million tax-free - but these thresholds have been frozen until at least 2030, dragging more families into the net every year.

Last year alone, the Treasury raked in a record £8.2 billion in IHT, driven by rising house prices and asset inflation.

From April 2027, most unused pension pots will also count towards a person's estate, raising fears of even more complex tax traps and further investigations.

Fiona Fernie, of tax specialists Blick Rothenberg, said: "Clearly there are plenty who view these new rules to be unfair, and that means there will be more people deliberately trying to get around them - often in legitimate ways, but still trying to get around them all the same."

HMRC defended its approach and said cases ranged from genuine mistakes to deliberate evasion.

A spokesperson said: "The vast majority of people pay the correct IHT. Investigations are only opened into cases where there's evidence the right amount of tax has not been paid."