HMRC’s intensified scrutiny of property valuations directly correlates with a significant rise in inheritance tax receipts. Early Tuesday, reports indicated that referrals to the Valuation Office Agency (VOA) surged by 23.5% over the past year.
The number of cases referred rose from 11,845 to 14,631 in just twelve months, ending September 30, 2025. This increase comes as inheritance tax receipts for the financial year 2025/26 reached £8.5 billion—a £200 million jump from the previous year.
Officials attribute this heightened scrutiny to the use of artificial intelligence and data matching technologies aimed at identifying discrepancies in property valuations. Laura Walkley, a tax expert, stated, “HMRC is clearly focusing on property valuations as a significant potential source of revenue.”
Executors need to be vigilant. If they fail to report property values accurately, they could face financial repercussions—including additional taxes and interest payments—potentially affecting their personal finances.
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. This means estates exceeding that threshold will incur a hefty 40% IHT rate.
In March alone, inheritance tax receipts generated reached £755 million—a record high. Yet, despite these figures, HMRC maintains that most individuals pay the correct amount of inheritance tax.
A spokesperson for HMRC noted, “As has always been the case, where it is suspected an individual has not paid correctly, investigations can be opened.” There has been a noticeable shift towards questioning figures submitted in IHT returns rather than accepting them at face value.
The increased scrutiny comes as market uncertainty complicates accurate property transactions. Officials have not disclosed specific details on how many investigations are currently underway or what criteria trigger them.
As HMRC continues to refine its approach using advanced technology, further developments are expected in how property valuations are scrutinized going forward.
