HM Revenue & Customs is mounting an increasingly aggressive offensive against residential property valuations submitted in inheritance tax (IHT) returns, with referrals to the Valuation Office Agency (VOA) surging by almost a quarter in the past year as the Treasury hunts for additional revenue from Britain’s wealthier estates.
Fresh research from private wealth and family law firm TWM Solicitors shows that the number of valuations passed to the VOA for closer examination jumped 23.5 per cent in the 12 months to 30 September 2025, climbing from 11,845 to 14,631. The figures lay bare a marked shift in approach from HMRC, which is now far more inclined to challenge the figures put forward by executors rather than waving them through.
For families navigating the already painful business of probate, the development is likely to add a further layer of complexity, expense and uncertainty. Lawyers report that what was once a relatively rare intervention has become a routine feature of estate administration.
Laura Walkley, head of private client at TWM, said the change of stance was unmistakable. “HMRC is clearly focusing on property valuations as a significant potential source of revenue,” she said. “There has been a noticeable shift towards questioning figures submitted in IHT returns, rather than accepting them at face value.”
Where solicitors might previously have heard from the VOA about a probate valuation “once or twice every few years”, she added, such queries are now arriving with growing regularity.
The numbers go a long way towards explaining why bricks and mortar have become the focus of Whitehall’s attention. According to HMRC’s own data, residential property accounted for 46.8 per cent of the net value of estates in the 2022/23 tax year, equivalent to a colossal £29.5 billion. With Britain’s housing wealth concentrated overwhelmingly in the family home, every percentage point shaved off a probate valuation translates into real money lost to the Exchequer.
That helps to explain the Treasury’s appetite for revenue. Inheritance tax receipts have soared by more than 61 per cent since 2020, reaching £8.3 billion. The combination of rising house prices and the long-running freeze on the £325,000 nil-rate band, which has not been lifted since April 2009 — is dragging an ever-larger pool of middle-class families into the IHT net.
Executors who underestimate, or who lean on a rough back-of-the-envelope figure from the local high street estate agent, now risk being caught out. Ms Walkley urged those handling estates to seek professional advice before submitting valuations.
“If an executor fails to report a property value properly, there can be financial consequences for the estate, such as additional tax and interest to pay — potentially by the executor personally,” she warned. “You are advised to use a proper valuation from a RICS valuer rather than an estimate from a high street estate agent.”
The wider picture is one of a tax authority bristling with new tools. Beyond the rising volume of VOA referrals, HMRC has been investing heavily in artificial intelligence, data-matching software and other big data capabilities, all of which are sharpening its ability to spot inconsistencies and errors buried within IHT returns. The result, according to TWM, is a sustained uplift in investigations and queries from the department.
For property investors and homeowners alike, the message from the taxman is unambiguous: get the valuation right first time, or be prepared to defend it.
