HMRC is ramping up its scrutiny of property valuations as part of a clampdown on inheritance tax avoidance.
The number of cases referred to the Valuation Office Agency (VOA) has risen 23.5% in the past year.
The figures showed referrals to the VOA were up from 11,845 to 14,631, in the 12 months to 30th September 2025.
Scrutiny
HMRC is increasingly bringing in the VOA to help with its scrutiny of inheritance tax returns reflecting its increased efforts to recover revenue from under-reported and misvalued estates.
Previously, lawyers would have been contacted by the VOA about a probate valuation “once or twice every few years”, and is now said to be happening more frequently, undisclosed sources have revealed.
Rising house and asset prices and frozen tax thresholds have resulted in more people having to pay IHT.
HMRC’s use of AI, data matching and other advanced big data tools, is also increasing its ability to identify inconsistencies and errors in IHT returns.
Property taxes
Inheritance Tax (IHT) has quietly become one of the Britain’s most significant property taxes as house values rise and frozen thresholds drag increasingly more people into the tax net.
IHT receipts hit £8.5billion, according to the latest figures published yesterday by HMRC.
Inheritance tax (IHT) receipts have climbed to a record £8.5billion for the 2025-26 tax year, marking a fifth consecutive annual high.
Receipts rose £200million on the previous year, with March alone generating an eye-watering £755million.
The main nil-rate band has been fixed at £325,000 since 2009, and has now been frozen until at least April 2031, meaning more and more homeowners are becoming liable for the tax as the value of their homes rises.
For many households, the family home is by far their largest asset, and in the more expensive regions, even modest properties can push estates beyond the threshold, after which the 40% IHT rate kicks in.
An HMRC spokesperson said: “The majority of people pay the correct amount of Inheritance Tax. As has always been the case, where it is suspected an individual has not, investigations can be opened.”
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