HM Revenue & Customs (HMRC) is increasingly challenging residential property valuations in inheritance tax returns rather than accepting them at “face value”.
The number of cases referred to the Valuation Office Agency (VOA) rose 23.5% in the last year, according to research from TWM Solicitors, a private wealth and family law firm.
Referrals to the VOA in the 12 months to 30 September 2025 rose from 11,845 to 14,631.
The role of the VOA is to provide property valuations to help HMRC determine how much inheritance tax is due.
The increase reflects HMRC’s increased efforts to recover revenue from underreported and misvalued estates, according to TWM Solicitors.
Laura Walkley, head of private client at TWM, said: “HMRC is clearly focusing on property valuations as a significant potential source of revenue.
“There has been a noticeable shift towards questioning figures submitted in IHT returns, rather than accepting them at face value.”
She noted that previously lawyers would have been contacted by the VOA about a probate valuation “once or twice every few years”.
Executors of estates need to take expert advice so that they know exactly what HMRC requires from them when it comes to including a property valuation in an IHT return.
Walkley said: “If an executor fails to report a property value properly, there can be financial consequences for the estate such as additional tax and interest to pay – potentially by the executor personally.
“You are advised to use a proper valuation from a RICS valuer rather than an estimate from a high street estate agent.”
According to HMRC figures, residential property accounted for 46.8% or £29.5bn of the net value of estates in the 2022/23 tax year.
Inheritance tax receipts are projected to hit £8.3bn this year, a 61% increase since 2020.
