HMRC’s property valuation scrutiny has intensified significantly. This follows a notable rise in inheritance tax receipts.
Early Tuesday, reports indicated that HMRC referrals to the Valuation Office Agency (VOA) rose by 23.5% over the past year. Referrals increased from 11,845 to 14,631 cases in the twelve months ending September 30, 2025.
As of midday, inheritance tax receipts for the 2025/26 financial year reached £8.5 billion. This marks a £200 million increase from the previous year.
Officials attribute this heightened scrutiny to advanced technology—specifically artificial intelligence and data matching—used to identify discrepancies in property valuations.
The main nil-rate band for inheritance tax has remained fixed at £325,000 since 2009 and will stay frozen until at least April 2031. The 40% IHT rate applies after estates exceed this threshold.
Executors who fail to report property values accurately could face significant financial consequences. Additional tax and interest payments may be imposed on them personally.
Laura Walkley noted, “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.
In March alone, inheritance tax receipts generated amounted to £755 million—a sign of the growing impact of estate planning concerns.
Yet, HMRC maintains that most people pay the correct amount of inheritance tax. A spokesperson stated that investigations can be opened where discrepancies are suspected.
The increased scrutiny comes as market uncertainty affects property transactions, complicating accurate valuations. No timeline has been shared regarding any further developments in this area.
As HMRC continues its rigorous examination of property valuations, the effects on estate planning strategies remain uncertain.