Solicitor typo mistake with settlement amounts - tax implications

Ostinato

Hi

I am looking for some advice. I am the executor of the estate (Scotland) for my Aunt who passed away at the start of this year.

We had instructed a solicitor who had obtained the balances of the open financial accounts and had processed the necessary paper work though the Sheriff Court. At the beginning of this process, they provided us a statement of the accounts and balances which totaled around £120,000.

Last week they have sent confirmation that this process is now complete, with evidence that these amounts/balances were submitted through the courts with an inheritance tax record of £120,000 for the sole beneficiary. However, in the final amount in the letter they have sent - the balance they have provided is now nearer £80,000. When we followed up with them to understand why this was, they advised that there was a typographical error made on their part and the original documentation should have been £80,000 and not £120,000. This was the result of someone entering an extra 0 on an amount of £5000 increasing it to £50,000.

They have now provided us with the statements and evidence from the various bank accounts that the true value is the lower amount. Whilst this is fine and we do not have a concern about the financial amounts, I am concerned that the amounts that have been provided to the Sheriff Court are inaccurate and also that the record provided to HMRC for inheritance tax is wrong. Whilst this does not have an impact on tax as it is under the inheritance threshold, I am concerned that the amounts are essentially fraudulent/incorrect. The sole beneficiary is also disabled and in receipt of benefits such as Pension credit, which I am concerned this inflated amount could impact as it will look as though they have inherited more than they should have.

The solicitor is pressing us to "close the matter" and allow them to pay out the final balance but we are looking for advice as to how to proceed. We are considering contacting Citizens advice and potentially looking for any other external legal consult but not sure if this is necessary.



Thanks in advance

buddy9

So my understanding would be that the solicitor applied for a Grant of Confirmation with an inventory showing an estate of around £120k due to an error, instead of the correct estate value of around £80k.

If you wish the error corrected, and the solicitor has not done so already, you might wish to request that the solicitor corrects the error by submitting a corrective inventory to the court (form C4(S)) and to do this at no additional expense to the estate.

user1977

Ostinato said:

We are considering contacting Citizens advice and potentially looking for any other external legal consult but not sure if this is necessary.

I don't think it is. And it isn't "fraudulent" - fraud requires a criminal intent. It's just a typo, and sounds like it's easily explained if anybody asked.

Keep_pedalling

As both those sums are way below IHT territory the error not only has no tax implications, there is also zero chance of it being treated as attempted fraud by HMRC. Under declaring the value an estate could certainly be treated as such if the value was close to the NRB but over valuing never will be.