Inheritance Tax - use of corrective form C4

ferrism · 5 February 2022 at 12:36PM

Good morning forum members.

I submitted my IHT400 some time ago and paid the tax due on an inheritance. Several accounts held were in foreign currencies and I calculated the sterling values using the exchange rates at the time of death, as instructed. Since then, exchange rates have changed quite dramatically for some of these currencies. I now expect to receive considerably less when the funds are finally released. I can't find anything to clarify what happens under these circumstances. I have a feeling that I just have to accept this, because the opposite could have happened. Even if I use the corrective form, C4, I don't think I could make any correction because the rules state that the exchange rate used should be as at the date of death.

Can anyone confirm my thoughts (or, preferably, shoot down my argument!)

Keep_pedalling · 5 February 2022 at 1:28PM

I know you can claim for shifts in the value of equities, but I am not sure if this applies to cash held in foreign currencies. A favourable shift in exchange rates would be subject to CGT, going the other way could be used to offset gains in other assets such a property.

SeniorSam · 5 February 2022 at 2:34PM

The only way to calculate exchange rates is by using the rate on the actual date of death, which you seem to have done. That is the only day that will be accurate. Some you win & some you loose.