Individuals' estates could be hit by thousands of pounds in fines after HM Revenue & Customs (HMRC) said it would take a tougher line on inheritance tax (IHT) valuations, lawyers warned.
Wedlake Bell, the law firm, said that HMRC's
new recommendation that individuals get three estate agent property valuations, instead of the current practice of obtaining two, seems to suggest it is planning to scrutinise IHT valuations in greater detail.
"HMRC is being incredibly harsh with personal representatives - most people would consider two property valuations as fulfilling the criteria of 'reasonable care'," said Victoria Mahon, solicitor at Wedlake Bell.
If an IHT property valuation is incorrect, estates could be fined up to 30 per cent of the additional tax liability on top of the additional tax due. There is a window of up to 12 months to submit IHT valuations before any penalties for a late account arise.
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