HM Revenue and Customs clawed back almost £70m through challenges to inheritance tax (IHT) valuations on the property of people who died in 2010 – and it is continuing to actively target estates and beneficiaries.
A freedom of information request obtained by accountants UHY Hacker Young has revealed that HMRC examined 9,368 inheritance tax valuations over the last year and has raised an average of £24,000 per case in additional tax.
The Impact of Inaccurate IHT Property Valuations on Beneficiaries
Estate beneficiaries – often the children of the deceased or their families – face financial penalties if HMRC investigates an IHT property valuation and finds it to be incorrect because “reasonable care” was not taken in establishing it.
The way in which HMRC has been examining IHT valuations has been to ask whether estate administrators sought professional advice from a qualified independent valuer and whether they questioned anything unusual about the valuation. Beneficiaries are expected to draw a valuer’s attention to factors such as development potential or the existence of tenancy or occupancy by people other than the deceased.
