How long to wait for HMRC?

hjd

My mother died in 2018. I was the executor. Her estate was large but not too complicated. I eventually got probate and all IHT was paid. She had had an accountant who prepared her tax returns and we checked that everything had been included. The estate was fully distributed, everything equally between me and my four brothers. My youngest brother, who lived with my mother, continued to live in the house which he bought with his share of the estate and some savings he put into the pot. All matters concerning the house and the transfer were dealt with by solicitors.
In August 2024, I received a letter from a company addressed to me as executor, saying that my mother had held a bond with them and they had found she had died from checking the probate registers. They informed me that she had bought this bond in 1993; no interest had ever been paid so it had not been on any tax returns. I provided the information requested and they paid out the bond to me (which was paid into the account I had designated as the executor's account, which was still open).
As directed by HMRC website I filed an amendment to probate. I calculated the tax due and the interest, and paid it, all in August 2024.
I calculated the interest myself using HMRC published rates, but then found a calculator on HMRC website to use. This gave me an interest figure about £1,400 less than I had calculated. I paid HMRC the figure calculated from their website. I paid out the net amount to myself and my brothers but kept back the £1,400.
I have never had any correspondence from HMRC since I initially got probate and paid the IHT, let alone sine I submitted the revision and paid extra tax a year ago.
So, after all this, my question is - do you think I am safe to distribute the £1,400 I have held back? I suppose I could ask HMRC but goodness knows when or if they would reply!

probate_slave

When you say an "amendment to probate" I assume you submitted a C4 corrective account with the date of death value for the bond, and paid additional IHT plus six years of interest (on underpaid IHT) based on the HMRC calculator. You believed the HMRC calculator was £1,400 too low and so held that amount back. 

First, I also found the HMRC calculator inaccurate earlier this year. It was over-calculating because the new, lower interest rate hadn't yet been applied. I used my own figure. So I think you are absolutely right to keep the £1,400 back until they eventually process your C4.

Secondly, a one year delay in dealing with corrections is currently normal. Have you tried phoning the helpline (0300 123 1072) with your IHT ref number, both to confirm that they received your C4 plus payment, and to ask for the matter to be "referred"? That might speed things up.

Thirdly, are you sure there aren't other tax consequences from this bond? For instance, if it's an investment bond wouldn't there be a chargeable event taxable on the deceased (but now outside the 6-year window). Or a capital gain on the estate between 2018 and 2024?

hjd

Thanks for your comprehensive answer. Yes, I submitted the C4 and paid the IHT and interest.
I wasn't sure if a year's delay was normal. I never received anything to confirm that the original probate and payments were all correct so wasn't sure what the normal procedure was.
I'll try ringing the helpline.
I can't remember exactly what sort of bond it was just now, but I went through all the details with the issuing company to confirm that it would only be subject to IHT.