Magee Gammon News HMRC investigates estate valuations as part of IHT campaign
HMRC investigates estate valuations as part of IHT campaign
J E Consulting October 3, 2018
The number of investigations conducted against estates thought to be avoiding Inheritance Tax (IHT) has increased, according to new data from HM Revenue & Customs (HMRC).
The tax authority has revealed that 5,400 estates were investigated during the 2017/18 tax year – a five per cent increase on the previous year's figure (5,100 estates).
This means that nearly a quarter (24 per cent) of all estates liable for IHT were investigated by HMRC for avoidance during the last tax year.
Experts have said that the rapid rise in property prices is a key factor to these investigations, as HMRC believes that additional value should be attributed to properties that have the potential for refurbishment, or that have land attached that could be developed.
If an estate is investigated by HMRC, beneficiaries may have to pay up to 100 per cent of the tax charged on the estate if the tax authority can prove avoidance has taken place.
Data shows that HMRC is increasingly challenging the value of estates as it has become a lucrative approach for uncovering unpaid liabilities.
An HMRC spokesperson said that their investigations into IHT ensured that everyone paid the right amount of tax.
Link: HMRC annual report and accounts: 2017 to 2018