Mistake on Inheritance Tax

Kilmaley01

Hi, I am reasonably new to the site so if this is in the wrong place I apologise and please let me know where I should post?

Towards the end of last year, we were one of 28 benificaries of a will. We received just over £20k which cleared almost all our debts.

This week we have had a letter from the solictors saying they had recently received an Inheritance Tax assesment from HMRC in relation to that estate. They say they contacted HMRC re this as it was their understanding that all I tax had been paid. Unfortunately they say that although they advised the Distridct Valuer that the property had been sold this info was not passed on to HMRC and the I tax was not paid in full. They go on to say that this was not picked up by them at the time of completing the administration of the Estate and apologise for their oversight!!

They then say they now require to pay I Tax of over £64k. And they need to pay it by 10th July!! The enclose an amended account and now want from us £4,170 by this date!

We dont have this money anymore. My question is, does anyone know if we have any rights regarding this. Is there anything we can do.

My sister inlaw inherited far more and they are asking her for £36k! She has spent a lot of the money doing up her house and invested the rest where she cannot get at it.

We are at our wits end as to what to do.

Any help would be gratefully appreciated!

Thanks in advance and hope!!

GeorgeUK

no idea, but my first reaction would be to contact nationaldebtline. If they can't advise, they should be able to advise as to who may.

Are the solicitors giving any refund for their mishandling of the estate? Might be worth asking about that too.

whatatwit

I think this may get moved to the Tax board.....

Was your inheritance a fixed amount bequest, or was it a % share of the residue after all bequests had been paid?

Maybe try and see if you can get a consultation with an independant solicitor and get their advice.

TonyMMM

Who filled in the IHT documents for the estate .... If the solicitors were the sole executors of the will, it would be their responsibility to ensure that the correct tax had been paid before distribution of the estate - any demand for cash now could be seen as an admission of their own negligence.

Get independent advice asap

Kilmaley01

Hi - am I being thick? I looked for a Tax board and couldnt see?

It was a % of the amount - 5%.

dancingfairy

Not sure on this but surely the Solicitors have messed this up and should have checked it out -after all isn't that what they are paid to do? It might be worth consulting another solicitor and taking legal action against the original solicitors for not doing what they are supposed to do. I guess you have to put in a formal complaint to the first solicitors first and see what their response is first though and maybe point out that you had no idea about it and it's not your fault and that you can't get the money that fast - I mean who can?
I guess if the solicitors can't sort it out - maybe you can approach HMRC together as a family and explain the situation.
But I agree with the OP who said try National Debtline first.
Maybe your local CAB will be able to help.
df

Tixy

This does not sound good. The solicitors clearly haven't handled things properly at some point.

Were the solicitors the exectuors of the will? If the solicitor dealt with the estate they should have sorted out calculation or payment of the ITax, (possibly with the help of an accountant), they shouldn't rely on the district valuer to tell HMRC.

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/InheritanceTaxEstatesAndTrusts/DG_4016736

I would write to the solicitors for an explanation of how this occured and why the ITax wasnt paid before you were given your inheritance.

However if it hasn't been paid then someone will need to pay it. Depending on how the will was written that could be each beneficiary or the beneficiary who was left the 'remainder' of the estate (after others had been paid fixed sums)

Kilmaley01

TonyMMM - my father in law was the Executor but the Solicitors are in Scotland - he is in England and they completed most documentation and sent stuff to him when needed for signature. My hubby ringing him now to find out who completed IHT documents.

Do we get solicitors reading posts on here? If we go for independent advice are we not going to have to pay a solicitor.

Kilmaley01

Tixy, everyone was left a % of the Estate.

beer_tins

Yes, may be worth getting a free half hour consultation with another solicitor. If your solicitors have been negligent, they may be liable and you could threaten litigation.

Alternatively, it may be the district valuer who has been negligent. Ask the solicitors for a copy of the correspondence between themselves and the District Valuer. Either way, good luck with sorting it.

Kilmaley01

Thought I'd better mention that this is Scottish Law!