HMRC challenges yield £108m in additional inheritance tax

By Lenore Rice

New research shows that the HMRC brought in 23 per cent more inheritance tax in 2013 as a result of challenging the valuation of estates, netting an additional £108million.

The research by UHY Hacker Young chartered accounts shows that on average an additional £34,704 paid inheritance tax was clawed back in every case the HMRC challenged the estate valuation submitted. The HMRC are said to be scrutinising more closely the valuation of property included in estates, and will do so even more in the coming year as the property markets in Northern Ireland and the rest of the UK begin to show steady price increases.

The HMRC are said to be analysing the property market in which any house included in an estate is situated, checking Land Registry records of sales of any houses in the immediate area to ascertain if the value put forward is correct. They are also attempting to ascertain if any improvements and modifications have been made to the house that would increase the value from the original purchase price.

Mark Giddens of UHY Hacker Young advises executors to carefully document the state of the property using photos immediately after the death of the owner, and before any improvement work is done to get it up to sale condition. He also suggests requesting a valuation from a qualified professional as opposed to just a brief comment or two from local estate agents.

If you are a testator or beneficiary requiring legal advice in respect of an estate, inheritance tax, or any other matter, contact one of the probate solicitors at Wilson Nesbitt by calling 0800 840 9293.

Or if you require information and advice on writing a Will, making a gift, or creating a trust, submit your details online for a call-back by clicking here.