Legal News | 30.04.26
Properly valued property: HMRC’s crackdown
Recent reports suggest that HM Revenue & Customs (HMRC) is increasingly scrutinising property valuations within inheritance tax (IHT) returns. According to recent data, the number of cases referred (by HMRC) to the Valuation Office Agency (VOA) rose by 23.5% in the 12 months from September 2024 to September 2025.
When submitting an IHT return to HMRC, the value of any property (as well as other assets) within the estate must be declared. These valuations determine how much an estate should be taxed and so an accurate valuation is needed to ensure the correct amount of IHT is paid.
Of course, with rising property prices but frozen IHT thresholds more estates are already being brought into the IHT net. The ‘Nil Rate Band’ (an IHT free amount of currently £325,000) has been frozen since 2009 and will remain frozen until 2031. The ‘Residence Nil Rate Band’ (an additional IHT allowance which can apply where individuals pass their main home to direct descendants) also remains frozen until 2031.
With a need to raise more money, the Government and HMRC are now turning their attention to and scrutinising property valuations. If they deem that a property has been undervalued in an attempt to pay less IHT, it will be referred to the VOA who will then undertake their own valuation.
As of 1 April this year, the work of the VOA was brought into HMRC, with the VOA ceasing to exist as an executive agency. The VOA is now responsible for valuing properties for business rates and council tax as part of HMRC in a bid to be more productive.
If a property valuation is scrutinised by the VOA, this could not only delay the administration of an estate but may also result in additional IHT being payable (with interest). To avoid an estate falling into this situation, it is recommended that personal representatives seek professional advice and obtain a RICS valuation of a property, rather than an estimate from high street estate agents.
If you would like assistance with administering the estate of a loved one, the Private Client Team at Wansbroughs can ensure the correct information is obtained and submitted to HMRC. You can contact the Private Client Team at wealth@wansbroughs.com.
