HMRC has intensified its efforts to clamp down on individuals evading inheritance tax (IHT) by increasing scrutiny of property valuations. The tax authority has registered a 23.5% rise in referrals to the Valuation Office Agency (VOA), with cases climbing from 11,845 to 14,631 between 2024 and 2025.
Crackdown on Property Valuation Discrepancies
HMRC is targeting discrepancies in property valuations submitted on IHT returns. Laura Walkley, head of Private Client at TWM, stated: "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."
Consequences for Executors
Walkley warned that executors who fail to report property values accurately could face financial consequences, including additional tax, interest payments, and potential personal liability for the estate's obligations. TWM Solicitors noted that VOA enquiries about probate valuations, which previously occurred "once or twice every few years" for most legal practices, are now happening with greater frequency.
Market Uncertainty Affects Property Transactions
The crackdown comes amid market uncertainty that has made accurate valuations more challenging. Foxtons reported a 35% decline in sales revenue for the first quarter of 2026, with total group revenue falling 10% to £39.6 million as market conditions deteriorated. Guy Gittins, Chief Executive Officer, said: "The Sales market remains subdued and has been further affected by recent events in the Middle East, which have tempered buyer sentiment and impacted mortgage rates and availability." He added: "We remain confident that the resilience of our Lettings and Financial Services businesses, which represents more than two-thirds of revenues, alongside work to reposition the Sales business, can continue to deliver market-leading results for customers, growth opportunities for our people and long-term value creation for shareholders."
