'Elephant in the room' question re IHT !

silvercar

uknick said:

castle96 said:

I wonder re this as well. The temptation to 'save' tax must be overwhelming (though a risk {plus a fine?})

If they could prove the executor knew about the gifts, I think it would become tax evasion which can result in a custodial sentence.  But, to get a sentence you would have to be really, really stupid and not cooperate with HMRC.

and if the executor is a solicitor?

castle96

NannaH said:

An executor surely couldn’t be expected to know, for example,  that the deceased had a non interest paying bank account 5 years ago that was emptied / gifts given and closed?   There might be no evidence of it ever existing. 

Exactly ! Who pays tax voluntarily?

Linton

Is shoplifting OK if the staff don’t see you? 

castle96

" a principle is a principle until it costs you money"

user1977

NannaH said:

An executor surely couldn’t be expected to know, for example,  that the deceased had a non interest paying bank account 5 years ago that was emptied / gifts given and closed?   There might be no evidence of it ever existing. 

As I alluded to above, if it's also so obscure that HMRC also aren't going to find out about it, then it shouldn't really be a concern of the executor.

But in a large proportion of cases, the executor will know fine well what the deceased was doing with their money 5 years ago. The executor could have been their attorney, for example, or a recipient of the gifts.

Keep_pedalling

user1977 said:

NannaH said:

An executor surely couldn’t be expected to know, for example,  that the deceased had a non interest paying bank account 5 years ago that was emptied / gifts given and closed?   There might be no evidence of it ever existing. 

As I alluded to above, if it's also so obscure that HMRC also aren't going to find out about it, then it shouldn't really be a concern of the executor.

But in a large proportion of cases, the executor will know fine well what the deceased was doing with their money 5 years ago. The executor could have been their attorney, for example, or a recipient of the gifts.

Exactly, the vast majority of executors are family of the deceased, the exact people who are likely to have received the gifts.

IHT is very much dependant on the honesty of the deceased and their executors, and although the chances of being caught committing fraud, especially for small amounts, may be low the consequences if your executors are caught are serious and the fines will cost your beneficiaries dearly. Extremely examples like the one in the opening post would be extremely high risk, but HMRC also carry out random investigations on IHT returns. 

NannaH

We know someone with £60k in his gun safe!
That’s why the push for a cashless society,  so ‘they’ know exactly who has what.
The amount of older folk who insist on paying DH in cash for a boiler repair etc.  is unreal,  we had to buy a safe because of it.  They don’t trust bank transfers or his card reader.   He is only allowed to pay £500 a day into his business account and that’s via a Post office, which is miles away so we’ve always got a pile of cash. 

Keep_pedalling

HMRC collected a record £326M from IHT investigation last year.

https://www.kingsleynapley.co.uk/insights/blogs/private-client-law-blog/hmrc-steps-up-its-investigations-on-inheritance-tax

uknick

silvercar said:

uknick said:

castle96 said:

I wonder re this as well. The temptation to 'save' tax must be overwhelming (though a risk {plus a fine?})

If they could prove the executor knew about the gifts, I think it would become tax evasion which can result in a custodial sentence.  But, to get a sentence you would have to be really, really stupid and not cooperate with HMRC.

and if the executor is a solicitor?

Not sure what your point is?  Do you think solicitors are immune from prosecution?

silvercar

uknick said:

silvercar said:

uknick said:

castle96 said:

I wonder re this as well. The temptation to 'save' tax must be overwhelming (though a risk {plus a fine?})

If they could prove the executor knew about the gifts, I think it would become tax evasion which can result in a custodial sentence.  But, to get a sentence you would have to be really, really stupid and not cooperate with HMRC.

and if the executor is a solicitor?

Not sure what your point is?  Do you think solicitors are immune from prosecution?

I was thinking that some people only go to a solicitor when they have reason to. So in their whole lifetime they may only have used a conveyancing solicitor when they have bought or sold a home and a solicitor specialising in probate and wills when they wanted to write a will. As such the solicitor will only know as much as the deceased has told them. They may be unaware of all the savings accounts/ works of art/ classic cars/ wine/ property etc.

It may even be that the deceased deliberately chooses a solicitor that they have had no previous contact with, to leave their offspring to decide what should be declared.