When administering an estate, executors must ensure that all assets are accurately valued for Inheritance Tax (IHT) purposes. Property often represents one of the most significant assets in an estate and, in some cases, HM Revenue & Customs (HMRC) may ask the Valuation Office Agency (VOA) to review the value reported in the Inheritance Tax return.
What is the Valuation Office Agency?
The VOA is an executive agency of HMRC that provides independent valuation advice for a range of taxes, including Inheritance Tax.
After an IHT400 has been submitted, HMRC may refer the valuation of a residential property to the VOA for review. This may involve the deceased’s home, a buy-to-let property, a holiday home or any other residential property within the estate.
What Happens During a VOA Review?
If a valuation is referred to the VOA, the executors will usually receive a questionnaire requesting further information about the property and how the valuation was obtained.
The VOA may ask for:
In some cases, the VOA may also inspect the property.
After reviewing the information, the VOA will either accept the value declared in the IHT400 or propose an alternative valuation. Any agreed increase in value may result in additional Inheritance Tax becoming payable by the estate.
The Importance of a Professional Probate Valuation
Executors have a duty to report an accurate probate property valuation. Where a property is of significant value, or where there is uncertainty regarding its worth, obtaining a valuation from a RICS-qualified surveyor can be invaluable.
A RICS Red Book valuation is prepared in accordance with recognised professional standards and provides robust evidence of the property’s market value at the date of death. Such valuations are widely recognised by HMRC, the courts and financial institutions and can help support the value reported for Inheritance Tax purposes.
How Our Probate Solicitors Can Help
A VOA enquiry can add complexity to the administration of an estate. Our Probate Team regularly assists executors with:
Obtaining specialist advice at an early stage can help minimise delays and ensure the estate is administered efficiently and in accordance with the executor’s legal duties.
Frequently Asked Questions
Can HMRC challenge a probate property valuation?
Yes. HMRC can refer a property valuation to the Valuation Office Agency for review and may request further evidence before accepting the value reported in the Inheritance Tax return.
Should I obtain a RICS Red Book valuation for probate?
While not mandatory, a RICS Red Book valuation is often advisable for higher-value properties or where there may be uncertainty regarding value. It provides independent evidence to support the valuation submitted to HMRC.
What happens if the VOA increases the property’s value?
If a higher value is agreed, this may lead to additional Inheritance Tax becoming payable by the estate. Executors can provide further evidence and engage in discussions before a final valuation is settled.
Does a sale shortly after death affect the valuation?
Potentially. If a property is sold relatively soon after death, HMRC and the VOA may consider the sale price when assessing whether the probate valuation accurately reflected the property’s market value at the date of death.
Contact Our Probate Team
If you have received correspondence from the Valuation Office Agency or require assistance with a probate property valuation or Inheritance Tax return, our experienced Probate Team based in Leicester and Market Harborough can provide practical advice and support throughout the estate administration process.
Written by Laura Brown, a Senior Associate Paralegal, checked by a qualified Solicitor and enhanced by AI
