IHT Compliance Check

cavyslave

I have just received a letter from HMRC informing me that they are going to be carrying out a check of my account. I have already paid a substantial amount of IHT based on my late BIL's savings and property valuation but it seems they want to investigate further. What should I expect?

Yorkshireman99

cavyslave wrote: »

I have just received a letter from HMRC informing me that they are going to be carrying out a check of my account. I have already paid a substantial amount of IHT based on my late BIL's savings and property valuation but it seems they want to investigate further. What should I expect?

Was a formal valuation of the property made by an RICS or similar? AIUI a certain number of estates are selected on a statistical basis for closer checking. The Diistrict Vualuerbis likely to be involved. Provided the executors can substantiate all the values used for probate there should be no,problem.

cavyslave

Thank you for your swift reply. I got 3 independent estate agent valuations and submitted the highest one. This was accepted by HMRC and I paid the IHT due based on that calculation plus his savings. Now HMRC have sent me the compliance check letter so I don't understand what's happening.

Yorkshireman99

cavyslave wrote: »

Thank you for your swift reply. I got 3 independent estate agent valuations and submitted the highest one. This was accepted by HMRC and I paid the IHT due based on that calculation plus his savings. Now HMRC have sent me the compliance check letter so I don't understand what's happening.

Estate agent valuations are not sufficient in case like yours. You may need to employ a professional RICS or similar to negotiate with the District Valuer if there is a difference in their appraisal.

cavyslave

Oh, but it was accepted by HMRC - they sent me an IHT bill based on that and my late BIL's savings, which I paid.

Wouldn't they have queried the valuation when it was first submitted if they were not happy with it?

Tom99

cavyslave wrote: »

Oh, but it was accepted by HMRC - they sent me an IHT bill based on that and my late BIL's savings, which I paid.

Wouldn't they have queried the valuation when it was first submitted if they were not happy with it?

No, they allow probate to be granted and for you to sell the house, but they reserve the right to look into the figures you have returned.

cavyslave

Thank you. I haven't sold the house yet so perhaps that's why?

Yorkshireman99

cavyslave wrote: »

Oh, but it was accepted by HMRC - they sent me an IHT bill based on that and my late BIL's savings, which I paid.

Wouldn't they have queried the valuation when it was first submitted if they were not happy with it?

Welcome to the Alice in Wonderland world of HMR&C! They are a law unto themselves and out of control.

Tom99

cavyslave wrote: »

Thank you. I haven't sold the house yet so perhaps that's why?

If you had 3 EA values and took the highest, I don't think you have anything to worry about. Did you send all three value with you IT form or just the highest one?

cavyslave

Just the highest one.

cavyslave

I've already paid £104k, I'm hoping there's not going to be much more to pay!