Recent reports indicate that HMRC is increasing its scrutiny of property valuations submitted as part of Inheritance Tax (IHT) returns, with a significant rise in cases being referred to the Valuation Office Agency (VOA).

This shift highlights the growing importance of obtaining accurate, professional inheritance tax valuations – particularly where property forms a significant part of an estate.

HMRC Increasingly Challenging Probate Valuations

The number of valuations referred by HMRC to the VOA has risen sharply in the past year, reflecting a clear change in approach.

Where property values submitted for probate may once have been accepted at face value, there is now:

• Greater scrutiny of figures
• Increased use of third-party verification
• More frequent challenges to submitted valuations

This means executors and advisors can no longer rely on informal estimates when reporting property values.

Why Inheritance Tax Valuations Matter

For many estates, property represents the largest single asset. With rising house prices and frozen tax thresholds, more estates are now subject to Inheritance Tax.

Key points to consider:

• The nil-rate band remains at £325,000 and is frozen until after 2030.
• Inheritance Tax is typically charged at 40% above this threshold
• Even modest properties can push estates into a taxable position

As a result, the accuracy of a probate valuation is critical. An undervaluation may lead to:

• HMRC investigations
• Additional tax liabilities
• Interest and potential penalties
• Personal liability for executors in some cases

The Role of RICS Valuations

Given HMRC’s increased focus, there is a clear expectation that property included within an estate is supported by a professional, evidence-based valuation.

A RICS valuation provides:

• Independent, expert advice from a qualified valuer
• A report prepared in accordance with recognised professional standards
• A defensible position should HMRC query the valuation

When is a Probate Valuation Required?

A professional valuation is typically required where property is included in an estate for:

• Inheritance Tax reporting to HMRC
• Probate applications
• Estate accounts and distribution
• Disputes between beneficiaries

In many cases, obtaining the correct valuation at the outset can prevent delays and complications later in the process.

Local Property Knowledge is Key

Property values can vary significantly even within relatively small geographic areas. Accurate inheritance tax valuations rely on a detailed understanding of local markets.

At Armitstead Barnett, we regularly provide probate and RICS valuations from our four offices at Garstang, Clitheroe, Kendal and Burscough.

We also cover all the surrounding areas, including:

• Preston
• Lancaster
• Lytham and the Fylde
• Leyland
• Chorley
• Blackburn and East Lancashire.

Our local expertise ensures that valuations reflect true market conditions, rather than broad assumptions.

Increasing Use of Data and Technology by HMRC

HMRC is also making greater use of:

• Data matching
• AI and analytics
• Cross-referencing of property transactions

This allows inconsistencies in valuations to be identified more easily than ever before.

Combined with rising IHT receipts -now at record levels -this signals a clear intention to ensure estates are correctly valued and taxed.

Conclusion: Getting it Right First Time

With HMRC placing greater emphasis on property valuations, the risks of relying on informal estimates have increased significantly.

Obtaining a professional inheritance tax valuation from a qualified RICS valuer provides:

• Accuracy
• Compliance
• Peace of mind for executors and beneficiaries

Need an Inheritance Tax or Probate Valuation?

Armitstead Barnett provides RICS-compliant inheritance tax valuations and probate valuations across Lancashire, Cumbria and surrounding areas.

If you require advice in Garstang, Clitheroe, Kendal, Burscough, Preston, Lancaster, Fylde, Lytham, Leyland, Chorley or Blackburn, our team would be pleased to assist.