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Nearly 1 in 4 Estates Subject to Inheritance Tax Investigated

Reasons to choose Wilson Browne

HMRC have opened on average 5,500 IHT investigations annually in recent years.

This is equivalent to approximately a quarter of all estates chargeable to tax.

It is imperative that all relevant information is given on IHT accounts both fully and frankly and there are circumstances where the personal representatives can find themselves personally liable for the payment of Inheritance Tax if it is not properly declared.

Where HMRC have conducted an investigation and tax remains outstanding they take proceedings if the amount of tax has been agreed with the tax payer or if HMRC have issued a Notice of Determination under s.221 of the Inheritance Tax Act 1984.

  • HMRC have a period of six years after delivery of the IHT account where the loss of tax is brought about carelessly but not deliberately;
  • Four years where the loss of tax has been brought about otherwise and
  • Twenty years after delivery of the account if the loss of tax to HMRC has been a deliberate act by the person liable for the payment of tax.

When no account has been delivered or property has been deliberately omitted from an account there is no limitation period if there is a loss of tax to HMRC.

We are able to advise in respect of the submission of IHT accounts and questions raised by HMRC and the submission of corrective accounts.

It is important to get advice at an early stage to avoid interest and penalties.

Vicki Pearce

Posted:

Vicki Pearce

Partner

Vicki is a Partner and head of our Private Client Team and our Care Funding and Court of Protection Team . She is based in Northampton. As head of both teams she is able to bring her expertise and obvious overlaps into both areas of…