Finalising Inheritance Tax Bill

Tom99

[FONT=Tahoma, sans-serif]I am dealing with my father's estate and probate was granted in January.

[/FONT] [FONT=Tahoma, sans-serif]When granting probate the Inheritance Tax Office said they were still looking into the figures I had provided and might contact me, this would primarily be the house value.

[/FONT] [FONT=Tahoma, sans-serif]Having spoken to the Inheritance Tax Office today they say they will not be writing to me to confirm a final bill yet but might write some time after I have paid what I think will be the full amount based on my calculations. They say they are very busy.

[/FONT] [FONT=Tahoma, sans-serif]I would obviously like to wrap up the administration and distribute the net amount to the beneficiaries but it seems I will only be able to make an interim distribution and will be hanging on, maybe for months waiting for the Inheritance Tax Office confirmation even after having paid what I hope is the final bill.

[/FONT] [FONT=Tahoma, sans-serif]Depending on the probate value agreed, CGT may be payable but I cannot submit any figure for CGT until the probate value is settled.

[/FONT] [FONT=Tahoma, sans-serif]Have others experience this type of delay?[/FONT]

Yorkshireman99

Lots apparently. Make a formal complaint via your MP.

Crabapple

Yes they take months.

If you haven't paid it all, do so now based on your calculations else interest will start to accrue.

getmore4less

If already sold, check with the tax board experts they may be able to guide on initiating a CGT assessment of the ascertained value for both IHT and CGT.

http://forums.moneysavingexpert.com/forumdisplay.php?f=22

monxton

Yes, I'm in the same position, also having got probate in January. See https://forums.moneysavingexpert.com/discussion/5674986.

I overpaid the IHT, on the basis that it's better to end up with HMRC owing the estate money than vice versa. Then I distributed most of the estate, but kept a bit back in case of any issues when probate is finalised, or for CGT.

Fortunately (?) the house sale dragged on past 6th April, which means that any CGT would not be due until next year.

eddyinfreehold

I'm in the same boat too. Date of my father's death was late Feb 2016. Probate was granted in late December 2016 after we had paid what the solicitor felt was the appropriate IHT and a little more later on following an HMRC corrected initial calculation. The 3 beneficiaries are also the 3 executors of the estate, namely me, my sister and brother. In January we distributed the house to 1 beneficiary and equal amounts of capital from the estate (as the house Probate valuation) to the other 2.

Because of a very complicated calculation relating to Estate Duty and IHT threshholds and a defunct and exhausted Trust Fund, we also calculated the worst possible scenario for additional IHT and interest and retained this in the Estate Account. Like everyone else we are waiting to hear any more from HMRC. Because of the complications we don't want to stir the pond so are really forced to sit on our hands until our paperwork appears at the top of the pile. It's been 8 months now. I really wouldn't be surprised if it was another year until something happens.

monxton

This was news to me:
Improvements to our Inheritance Tax process and timescales

They clarified in the following newsletter that:

The new process and timeline applies to form IHT400s processed by us on or after 16 April 2018

so it doesn't apply to me then.

I sent in an IHT30, but I expect it will go in the same wastebin as my previous correspondence.

HHarry

I paid the IHT that I had calculated was due, plus a bit.

HMRC wrote to me acknowleding the payment and gave the Ok for Probate in September. They reserved the right to re-check my figures, but stated that if I hadn't heard anything in 12 weeks it was accepted. The overpayment would be refunded after thus date.

I'm not sure if the 12 week rule is a new thing, but it seems to resolve the excessive wait.


Sorry - hadn't read Monxton link. Looks like I got lucky with the dates.

eddyinfreehold

There was a special HMRC Newsletter in April 2018. A bit late for me as an executor but things seem to have speeded up a bit. There is a link to the newsletter below where the 12 week bit is mentioned. As always no guarantees from HMRC but a better situation than before...


https://www.gov.uk/government/publications/hm-revenue-and-customs-trusts-and-estates-newsletters/hmrc-trusts-and-estates-newsletter-special-edition-april-2018

monxton

monxton wrote: »

Improvements to our Inheritance Tax process and timescales

eddyinfreehold wrote: »

There is a link to the newsletter below where the 12 week bit is mentioned. As always no guarantees from HMRC but a better situation than before.

Yes, that's the same link I already posted above, but as I said, they explicitly stated in the follow-up newsletter that this change is applicable only to IHT400s processed since April 2018. Good news for new applicants though.

eddyinfreehold

I'm sorry Monxton, I hadn't realised you had actually posted the link. I read your post but didn't scroll over it, so it didn't highlight. Hence my recent (unnecessary) addition..


I agree, it's a better system now for new users but doesn't/didn't help our cases. We still haven't finished ourselves but we are nearly there after 3 years... although the IHT portion is now effectively complete. We have a letter saying that they have concluded any Compliance Investigation without implementing any changes, but if anything is discovered in the future we have to reinform them. This won't be the case as we have everything already discovered and declared. It just isn't formally signed off which is a shame because it would be much neater if it were. The remaining parts of the estate are annual declarations of CGT during the administration period for 3 tax years spread over 28 months and we are waiting for the 2nd and 3rd bills from HMRC. Any penalty has been waived because of the original delay.


Hopes this adds to the thread.