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There is no technique for avoiding an HMRC compliance check, and this guide does not offer one. HMRC does not publish its risk criteria, so anyone claiming to know what score a return will get is guessing. What HMRC does publish is what it checks, which body values what, and how long it has to come back. That is what this guide sets out, so you can get the return right rather than try to make it look right. For an overview of what happens if HMRC does contact you, see our guide on receiving an HMRC IHT compliance check letter.
HMRC does not publish how it selects returns for a compliance check, and no official source ranks the reasons. What HMRC does say, in its own guidance and forms, is which parts of a return it looks at and how:
HMRC checks property as a matter of routine, not as a response to suspicion. Its IHT400 notes say: “We'll usually ask the Valuation Office Agency to give us their opinion of the value of the deceased's property… If the Valuation Office Agency can not accept the figures you've used, they will try to agree a value with you. If the agreed value is more than the figure that you've suggested, you may have to pay some more tax (and interest).” The Valuation Office Agency covers England, Wales and Scotland; in Northern Ireland the equivalent is the Valuation and Lands Agency.
No official source publishes a tolerance — a percentage by which a valuation may differ from comparable sales before HMRC will query it. Any figure you see quoted for that is somebody's guess, and treating it as a margin to work within is the wrong way round: the rule is that the figure must be the open market value at the date of death, whatever that turns out to be. See our guide on what happens if you give the wrong property value for probate and our guide to valuing property for probate.
Question 1 of IHT403 asks directly whether the deceased made any gifts or transferred assets to or for the benefit of another individual, charity or organisation. Questions 8 and 9 ask about transfers made at any time after 18 March 1986 where the deceased kept a benefit. Answering those questions accurately requires looking — at bank statements, at correspondence, at the register of title for any property.
A gift does not have to produce a tax bill to belong on IHT403 — where it is exempt, you name the exemption in the ‘type of exemption or relief’ column. HMRC does name gifts you should leave off: totals of £3,000 or less in a tax year, amounts of £250 or less, and gifts to a spouse or civil partner covered by the exemption. For a full explanation of gift declaration requirements, see our guide on declaring gifts for probate and IHT.
HMRC uses its Shares and Assets Valuation team for shares and other complex holdings. For household and personal goods, HMRC's notes say you do not need a professional valuation for ordinary items you can price from publicly available data, but that “if you think any item may be worth more than £1,500, or you're not sure, we advise you to get a professional valuation”.
A claim to the residence nil-rate band, business relief or agricultural relief has conditions attached, and HMRC will want to see they are met. The IHT400 notes say what the form asks for in each case; the conditions themselves are set out below.
HMRC's notes put two continuing duties on the executor. On provisional estimates: “it's your responsibility to tell us what the final figures are as soon as you know them”. On changes: “If the value of any asset or debt changes, you must tell us”, though only where the change affects the tax payable.
The standard HMRC requires is "open market value at the date of death" — the price a willing buyer would pay a willing seller in an arm's-length transaction, with both parties having reasonable knowledge of the market.
HMRC's IHT400 notes say that “Valuing land and buildings can be a complicated area and you're strongly advised to use a professional valuer”, and that the valuer should be asked to take account of the state of repair of the property and of any features that might make it attractive to a builder or developer. Schedule IHT405 adds: “If you have a professional valuation, enclose a copy with the completed form.”
Two further points from the same notes. If several valuations give a range, “it's probably best to adopt a value that's somewhere in between the highest and lowest values that you've got”. And if, after getting a valuation but before applying for the grant, you learn something that casts doubt on it — the example HMRC gives is marketing at £270,000 a property you valued at £250,000 and receiving offers at that figure — “you must reconsider it” and ask the valuer to consider amending the valuation.
Condition is part of the open market value, not a deduction from it. HMRC's notes tell you to ask the valuer “to take into account the state of repair of the property (which may decrease its value) and any features that might make it attractive to a builder or developer, such as large gardens, or access to other land that's suitable for development (which may increase its value)”. Documenting the condition at the date of death — photographs, a schedule of condition, the valuer's own description — is what lets you show the figure was arrived at properly.
IHT403 covers gifts made on or after 18 March 1986, with a short list of things HMRC tells you to leave off: gifts totalling £3,000 or less in a tax year, amounts of £250 or less, and gifts to a spouse or civil partner where the exemption applies. Everything else in the window goes on the form, with any exemption named. The reason to declare an exempt gift is that HMRC needs to see the exemption was applied correctly — and, under section 240 of the Inheritance Tax Act 1984, an omission that turns out to be careless extends HMRC's window from four years to six, and a deliberate one to twenty.
To find gifts, review all bank statements, building society passbooks, investment records, and correspondence for the 7 years before death. Ask family members directly. Check Land Registry for any property transfers. Even interest-free loans, debt waivers, and assets sold at below market value must be assessed.
Gifts within annual exemptions (£3,000 per tax year, small gifts of up to £250 per person) do not count as chargeable but should still be noted in your working papers in case HMRC asks.
Bank statements are how gifts are usually found, and HMRC can ask to see them during a compliance check. As executor you will need them anyway, to establish date-of-death balances and to answer question 1 of IHT403 honestly. How long to keep them follows from section 240 of the Inheritance Tax Act 1984: HMRC has four years from the later of the date the tax was paid or became due to recover additional tax, six years where the tax was lost carelessly, and twenty years where it was lost deliberately.
If the deceased held accounts at multiple institutions, request statements from each. Many banks will provide statements for the deceased's accounts upon sight of the death certificate and grant of representation. Keep a complete set of these in the estate file.
Assets held jointly with another person must be included in the IHT return at the deceased's share of the value. This applies even if the surviving joint owner will continue to use the asset without interruption. Common joint assets that are sometimes overlooked include:
These go on Schedule IHT404, ‘Jointly owned assets’. Where the joint assets include houses, land or buildings you also complete IHT405 to describe the property.
The share is not always a straight fraction. For accounts and shares, HMRC says to find the whole value and include the deceased's share of it. For a house or land, a discount may apply: under English law HMRC's notes let you “reduce the arithmetical share of the value of the whole of the property by 10%” as a starting point; under Scottish law the starting point is to deduct £4,000 from the value of the whole before working out the share. There is one firm exception — “you must not apply any discount if the other joint owner is the deceased's spouse or civil partner”.
Do not simply omit joint assets on the basis that they "pass automatically" to the survivor. Assets that pass by survivorship outside the estate still count for inheritance tax — they are simply exempt under the spouse exemption if passing to a surviving spouse or civil partner.
Where the deceased was a long-term UK resident, inheritance tax applies to their worldwide estate, and foreign assets go on Schedule IHT417, ‘Foreign assets’ — including jointly owned assets outside the UK, which go on IHT417 rather than IHT404. Common examples are overseas bank accounts, property abroad and foreign investment accounts. Relief for foreign tax paid, or a double taxation treaty, reduces the tax; it does not remove the asset from the account.
The position is different where the deceased was not a long-term UK resident. Their assets outside the UK are generally excluded property, and UK inheritance tax reaches only their UK assets. See our guide to UK inheritance tax where the deceased lived abroad.
The RNRB (currently £175,000 per person) is available where a home the deceased lived in passes to their direct descendants. GOV.UK defines a direct descendant as “a child, grandchild or other lineal descendant” or “a spouse or civil partner of a lineal descendant (including their widow, widower or surviving civil partner)”. Leaving the home to your own surviving spouse or civil partner does not qualify — their estate may claim the transferred RNRB later, on IHT436, but the first estate does not get it for that gift.
The RNRB tapers away for estates worth more than £2 million, reducing “by £1 for every £2 that the estate is worth more than the £2 million taper threshold”. One trap in that arithmetic: for taper purposes the estate is all the assets less debts and liabilities, and GOV.UK is explicit that you “do not take off any exemptions such as spouse exemption [or] reliefs such as agricultural or business property relief”. An estate that pays no tax can still lose its RNRB.
Business Relief applies to qualifying business assets, which must generally have been owned for at least two years and must not consist wholly or mainly of dealing in property or investments. For deaths on or after 6 April 2026 the current IHT400 schedules state that 100% relief on the combined value of qualifying agricultural and business property is limited to £2.5 million, with the excess qualifying at 50%. Shares on a market that does not meet HMRC's definition of ‘listed’ — the Alternative Investment Market, for example — now qualify for 50% relief only.
Agricultural Relief is due on the agricultural value of qualifying property, not its open market value, and the rate turns on the occupation and tenancy position. It shares the same £2.5 million allowance as Business Relief for deaths on or after 6 April 2026. That allowance also takes in gifts of qualifying property made on or after 30 October 2024 and within seven years of the death, and any unused part can be transferred from a late spouse or civil partner if a claim is made within four years of the survivor's death or six months of the personal representatives starting their role. Evidence of agricultural use, ownership duration and tenancy arrangements must be retained.
There is no published scoring system to write to. There is a set of things the form and its notes require, and doing them is the whole of what an executor can control:
For a guide to completing the IHT400 itself, see our IHT400 form guide.
Even with the most thorough return, HMRC may still raise a query. This does not necessarily mean they believe you have done anything wrong — it may simply be a routine check. The key is to respond promptly and fully, with supporting evidence for every figure queried.
For step-by-step guidance on responding to HMRC, see our guides on how to respond to an HMRC probate query and HMRC querying your property valuation.
For a broader overview of common pitfalls, see our guide to common probate mistakes executors make.
HMRC does not set out its data sources publicly. What its notes do say is that it will usually ask the Valuation Office Agency — the Valuation and Lands Agency in Northern Ireland — for an opinion on the value, and that the VOA “will try to agree a value with you” if it cannot accept your figure.
Not every return gets a detailed review, but HMRC does not publish how it selects the ones that do, so nobody outside HMRC can tell you the odds for a particular estate. What is published is that HMRC looks at the account in more detail after it has returned your probate values and code, and that it may ask questions about values, debts, exemptions and reliefs.
Section 240 of the Inheritance Tax Act 1984 sets three windows, measured from the later of the date the tax was paid or the date it became due: four years normally, six years where the loss of tax was brought about carelessly, and twenty years where it was brought about deliberately. Note that careless is six, not four — the four-year window is the one that applies when nothing went wrong.
HMRC's manual says that where land is in the UK it relies on professional advice from the Valuation Office Agency (VOA) — which covers England, Wales and Scotland — or the Valuation and Lands Agency in Northern Ireland. The VOA will try to agree a value with you. If you cannot agree, the dispute can go to the tribunal, and you can instruct your own surveyor to put your case.
Usually yes, and you name the exemption in the ‘type of exemption or relief’ column. The exceptions are the ones HMRC names: gifts totalling £3,000 or less in a tax year, amounts of £250 or less, gifts to a spouse or civil partner covered by the exemption, and regular gifts out of income where the total did not exceed £3,000 in each year. Where those are the only gifts, HMRC's notes say you can tick ‘No’ at box 30 of the IHT400 and not fill in IHT403 at all.
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