The insurance company says that delays in sorting out the finances of an estate, especially where property is involved, means that some friends and family members who have agreed to act as executors can find they need to foot the bills while they try and sell assets. While the money can be reclaimed once the estate is settled it still leaves executors in a difficult position.

Inheritance tax must be paid by the end of the sixth month after death, but Royal London says the complexity of the process and the assets contained within many estates means assets are unlikely to be sold in time to meet this bill. 

It says property price growth has made inheritance tax a growing issue for executors, and highlights figures from HMRC show approximately 19,000 estates were liable for IHT in 2013/14 while the number is set to rise to around 30,000 estates in 2016/2017.

Helen Morrissey, personal finance specialist at Royal London said: ‘We are seeing more estates than ever subject to inheritance tax and larger estates can take a long time to wind up. Many executors may have no idea that they could be responsible for finding the money for a large tax bill before money in the estate is available.

‘While the money can be reclaimed once assets have been sold it is an issue that could cause many executors real financial stress during an already difficult time.  HMRC needs to think again about giving executors who are acting in good faith more time to sort out an estate before they start demanding tax.’