Recent research from accountancy firm UHY Hacker Young has found that HMRC has been increasing the amount of tax raised through inheritance tax (IHT) by challenging more valuations placed on estates containing property.
According to the research, this approach has increased the tax raised by 23% in the last year alone. Figures show that these challenges have added an extra £108 million over the last tax year, a jump over the £88 million raised in a similar way in 2011/12.
Mark Giddens, a partner with the accountancy firm, says: “Last year HMRC increased the amount of extra tax it took through investigations into property valuations for Inheritance Tax far faster than house prices rose.”
“That suggests that they are taking a pretty aggressive approach and are perfecting their techniques for challenging the property valuations submitted to them. With house prices set to rise further in the coming year that will push more properties above the minimum threshold, it is likely that IHT will continue to be a lucrative area for HMRC to focus on.”
UHY Hacker Young also found that HMRC raised additional tax worth £34,704 on average for each successful property valuation challenge last year. This is an increase over the average of £27,227 that it was able to raise in 2011/12.
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