Claiming back inheritance tax?

Cazzy50

My mother in law died a couple of years ago (just before the rise in the IHT threshhold). Probate was granted and tax paid on the value of the property at date of death. We are currently in the process of selling the house but at a much lower price than the valuation. Is there any way we can reclaim IHT overpaid? I have tried to make sense of the hmrc.gov.uk website but no luck!

Here's hoping!

Pee

That sounds like October 2007? Well, you have three years to sell the house at a lower value and make the claim for a refund of IHT. That is three years from the date of death and presumably you need to exchange but not complete within the three years, although you should look into that if it is relevant.

John_Pierpoint

http://www.hmrc.gov.uk/manuals/ihtmanual/IHTM33022.htm

Cazzy50

Thanks for your quick reply and for the 3 year rule. The house is currently in the process of being sold and the buyer wants completion by 1st May. Mother in law died 02.03.07 and my question now is who do I contact?
Thanks
Cazzy50

noh

Cazzy50 wrote: »

Thanks for your quick reply and for the 3 year rule. The house is currently in the process of being sold and the buyer wants completion by 1st May. Mother in law died 02.03.07 and my question now is who do I contact?
Thanks
Cazzy50

Complete this form:- http://www.hmrc.gov.uk/cto/forms/iht38.pdf
and return to the address given.

Nigel

John_Pierpoint

I've not got this far with the house I have got to sell but don't forget:
- Unlike CGT your costs of sale don't count for IHT relief.
- HMR&C consider 400 quid trivial, so don't bother unless your post death loss is greater than 1000 GBP.

Cazzy50

Pee wrote: »

That sounds like October 2007? Well, you have three years to sell the house at a lower value and make the claim for a refund of IHT. That is three years from the date of death and presumably you need to exchange but not complete within the three years, although you should look into that if it is relevant.

Re the 3 year rule, I have form IHT38 in front of me and it states that the sale must occur within 4 years of the date of death (3 years if the date of death was on or before 15 March 1990). The period may be extended if the sale is to an authority with compulsory purchase powers.

Cazzy50

There is no mention on form IHT38 of us being able to claim interest lost on the tax already paid. Any chance?

Mikeyorks

This gives the general principles on IHT repayment supplements (interest on refunds) :-

http://www.hmrc.gov.uk/manuals/ihtmanual/IHTM31665.htm

......... and this the applicable rates :-

http://www.hmrc.gov.uk/rates/interest-repayments.htm#it

John_Pierpoint

Mikeyorks wrote: »

This gives the general principles on IHT repayment supplements (interest on refunds) :-

http://www.hmrc.gov.uk/manuals/ihtmanual/IHTM31665.htm

......... and this the applicable rates :-

http://www.hmrc.gov.uk/rates/interest-repayments.htm#it

Has IHT become a voluntary tax for the first 12 months after death?
(Nothing would surprise me given the current state of chaos of the present government)

http://www.hmrc.gov.uk/rates/interest-late.htm#it

Perhaps the powers that be realise that pressure form the beneficiaries for a payout is sufficient to get the tax paid on time?
It certainly helps take the pressure off someone with hard to sell assets, where IHT can be paid in stages.