HMRC Is Looking More Closely at Probate valuation in Estates — Why Accuracy Now Matters More Than Ever
For many years, inheritance tax was something most families assumed applied only to the very wealthy. In the South East in particular, that is no longer true. Rising property prices combined with frozen tax thresholds mean ordinary family estates now regularly fall within the inheritance tax (IHT) regime — and HMRC has begun checking them far more carefully.
Recent reports show a clear shift in approach. HMRC is no longer relying solely on what executors declare on probate forms. Instead, it now cross-checks information against external data sources such as Land Registry records, trust registrations and publicly available property information. In other words, estates are increasingly being verified rather than simply accepted.
This change is important because most executors are family members, not professionals. They are doing their best at a difficult time, often under pressure to complete paperwork quickly and distribute funds. But the modern system expects a level of evidence that many people simply do not realise is required.
The main area of risk: valuations
The most common trigger for enquiries is valuation — particularly of property.
Executors frequently obtain a few informal opinions from estate agents to meet deadlines. Months or years later, the property sells at a different price. That difference can prompt HMRC to revisit the estate and reassess the tax position. In a taxpaying estate, HMRC expects the estate to arrange and pay for a proper, ‘red book’ valuation for inheritance tax purposes but a surveyor.
It is not only houses. Jewellery, collections, antiques and even good quality furniture are increasingly scrutinised. Items are often omitted unintentionally because families do not think of them as taxable assets, but legally they form part of the estate.
Lifetime gifts are another frequent problem
Many families know gifts made within seven years of death may affect tax. Far fewer keep a proper record of them.
From HMRC’s perspective, incomplete information is a warning sign rather than an explanation. Where gift records are unclear, enquiries often follow.
This matters because executors carry personal responsibility. If tax is underpaid and the estate has already been distributed, HMRC can pursue the executors themselves.
A surprising development — record tax refunds
Interestingly, increased scrutiny works both ways. Large sums of inheritance tax are also being repaid.
This usually happens where assets fall in value after death. Property may sell for less than the probate valuation, or shares may drop. In these situations, the estate can reclaim overpaid tax — but only if the correct procedure is followed and the claim is made within strict time limits.
Many families never realise they are entitled to a refund.
Why this matters for modern estate planning
The inheritance tax system is quietly shifting from a “good faith declaration” model to an evidence-based one. Executors are expected to justify figures, retain records and sometimes defend decisions years later.
That does not mean estates need to become complicated. It does mean preparation helps enormously.
Practical steps include:
- keeping a simple lifetime gift log
- obtaining appropriate valuations
- delaying distribution until tax positions are secure
- ensuring executors understand their responsibilities
Good planning is no longer just about saving tax. It is also about reducing stress, avoiding disputes and protecting the people dealing with your affairs.
A final thought
Most problems we see in probate valuation do not arise from wrongdoing — they arise from uncertainty. Families want to do the right thing but lack clear records and guidance.
Clear instructions, organised information and realistic expectations make an enormous difference at a difficult time. Increasingly, they also prevent costly enquiries later.
If you would like help reviewing your Will or assistance with obtaining a grant of probate, email Rebecca D’Arcy at Chiltern Wills on info@chilternwills.com.
