HRMC Hell!

vigman

I've discussed parts of this problem in other threads so apologies if I have overlapped but things are really serious now.

My sister-in-law and an accountant and solicitor have been working on her father's estate as she was executor

He was psychopathically secret about his affairs to everyone except a special adviser (an old school friend) who we realise has stolen large sums of money in the past

However we worked out what was owned at the father's death

This was valued professionally four times to satisfy HMRC

They then started sending pages of questions about the father's tax affairs going back years

My SIL has answered every question truthfully but stating where necessary that she has no knowledge of any financial dealings before the date of his death.

However today she received another 9 pages of questions from HMRC and the Human Rights Act with the warning about penalties for withholding information

She is seriously physically and mentally ill after two years of this

How can she prove that she has been 100% honest with HMRC? Is it worth getting a sworn oath drawn up to that effect?

This is making the whole family unwell but especially SIL who is dealing with all this whilst undergoing sessions of surgery

How can we put an end to this misery? She has already paid more IHT than I can calculate is owing on the estate!

My wife, who is very level heade, rang tonight to say she seriously believes this will kill her sister and her doctor has basically said the same thing today

Please can anyone give constructive help as everyone is at their wits end

TIA

Vigman

Brynsam

Why is HMRC sending her pages of questions referring to the Human Rights Act?

How about the accountant, solicitor and doctor sending a combined response to HMRC?

SeniorSam

Surely with a large estate he would have had annual accounts and they would be with the accountant. He should have figures from the past?

vigman

Brynsam wrote: »

Why is HMRC sending her pages of questions referring to the Human Rights Act?

I wrote 9 pages of questions AND the Human Rights Act

Having researched this they send you this to let you know it is your right not to answer questions that might incriminate you. Usually before a penalty is issued

Vigman

vigman

SeniorSam wrote: »

Surely with a large estate he would have had annual accounts and they would be with the accountant. He should have figures from the past?

Every financial matter was handed to the 'adviser' a local businessman, school friend and crook...... also POA in later years. He was the only person who knew what was owned and earned and who also did the tax returns

In the last four years of my FIL's life he was in a home with dementia, blindness and paraplegia.

My SIL took legal action to remove the 'adviser' as POA and remove him as joint executor

After his death my SIL had to engage an accountant to go through every bit of paperwork we could find. There were no records of past tax returns.

It is a sad and bitter situation made worse by two years of hounding by HMRC despite payments being made when demanded

It is also a situation that can't be rationalised. Why the family was so secret and why they trusted someone who everyone else knew to be crooked, will never be known

Vigman

Keep_pedalling

SeniorSam wrote: »

Surely with a large estate he would have had annual accounts and they would be with the accountant. He should have figures from the past?

Unless the secretive father and his friend/advisor had been involved in some serious tax evasion, with assets and income kept off book, and unfortunately it sounds like it could be the case here.

All I can suggest is she lets professionals deal with HMRC on her behalf. Being an executor comes with some serious responsibilities, and unfortunately in this case it would seem the testator has created a massive problem for his, which she has no legal route out of.

Margot123

Is there any way that your SIL can resign as an executor on medical grounds? There appears plenty of professional evidence to support her, including the doctor.

I'm sure the law must have provision for such a situation. Please ask her to consult specialist legal advice immediately.

vigman

Margot123 wrote: »

Is there any way that your SIL can resign as an executor on medical grounds? There appears plenty of professional evidence to support her, including the doctor.

I'm sure the law must have provision for such a situation. Please ask her to consult specialist legal advice immediately.

We have been investigating that route but at this stage it is extremely complicated.

It is even more complicated as there are no backup executors since the crooked one was legally removed ( thank goodness)

I'd like to hear from anyone who has been through changing an executor through illness at this late stage though, please?

TIA

Vigman

vigman

Keep_pedalling wrote: »

Unless the secretive father and his friend/advisor had been involved in some serious tax evasion, with assets and income kept off book, and unfortunately it sounds like it could be the case here.

All I can suggest is she lets professionals deal with HMRC on her behalf. Being an executor comes with some serious responsibilities, and unfortunately in this case it would seem the testator has created a massive problem for his, which she has no legal route out of.

I am sure there has been illegal activity by the adviser previously. He is not only very elderly himself but his family has warned any of us off approaching him.

My SIL is answering anything asked of her truthfully via an accountant and a QC at one stage but there is no knowledge of what took place in the past before she got the adviser removed as POA and joint executor.

She has paid hundreds of thousands of pounds upfront for IHT and as I said before with my knowledge now of the estate (with greatful thanks to the Land Registry) I already make this far more than the 40% due after the tax free allowance is removed.

They have combined the execution of the estate with a full blown tax investigation.

To now threaten her with penalties is the last straw and somehow the HMRC have got to be made fully aware of all the difficulties

A perfect recent example of the problems faced. A man came to our door recently and asked to speak to my wife. He asked when the private road was going to be repaired. FIL had sold land for the 'adviser' to build two houses on and apparently FIL owned the road at the time of his death. My wife said that we hadn't received any money yet to pay for such repairs and the man replied "What, with the huge amount I paid for the ransom strip?!"

This is the first we had ever heard about a payment for a ransom strip two years after FIL's death and certainly nothing was in the bank records. This sort of event happens all the time and is truly shocking.

Vigman

Keep_pedalling

I am not surprised HMRC are running a full blow investigation. The estate is responsable for settling any unpaid taxes, and it sounds like your FIL was up to his eyeballs in serious tax fraud, which is probably why he was so secretive.

Whatever the advisors roll in this was you FIL was responsable for paying his taxes, so if, as sounds likely, there are unpaid income and capital gains taxes due they are going to do their hardest to get those back from the estate.

Providing the estate has sufficient assets to pay the penalties and any outstanding taxes then your SIL should not worry about any personal financial impact on her. It is worrying however that significant assets may have been removed from the estate in the last 7 years as these would still form part of the estate and could push the estate into insolvency, which would be a nightmare for her and anyone who received significant gifts in the years prior to his death.

badger09

vigman

This sounds like an absolute nightmare for your SIL, but it does appear that HMRC have good grounds for opening an in depth investigation/enquiry.

You say she has an accountant helping her. Unless that accountant is experienced in handling HMRC enquiry cases, I suggest she appoints such a specialist sooner, rather than later.