When the tax-collector comes knocking

Dealings with HMRC don't always run smoothly! You may have gone about filling out your forms in good faith and even paid the IHT due, but that won't stop the tax-collector from picking holes in your calculations. HMRC will be in touch if:

When the tax-collector comes knockingA mistake was made when totting up the value of property, shares, or other assets.

When the tax-collector comes knockingThe value you put on an asset is disputed.

When the tax-collector comes knockingHMRC believes that the deceased's estate is bigger than you said. This doesn't mean they think you lied, but perhaps they think the deceased broke some tax rule to reduce their estate's exposure to inheritance tax.

A dispute often occurs when the deceased gifted a large asset less than seven years before he or she died. For example, the deceased may have given the family home to a close relative with the ultimate aim of keeping it out of the tax firing line. However, if the deceased continued to live in the home after gifting it then the gift can be considered a gift with reservation of benefit. As a result, the gift (the house in this case) may still be liable to some sort of IHT charge. Chapters 15 and 16 have more on this sort of gift.

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