Memorial service costs - IHT deductibility

TheGreenFrog

HMRC manual states that staff should seek advice where a claim for memorial service expenses is made. This suggests that such expenses may on occasion be deductible. Would this be the case where, a month or two after death, a memorial service is held where there has been no prior funeral service (because body disposed of without any ceremnoy)?

sheslookinhot

What costs were associated with a memorial service ?

I would think that where there is a service and involvement of undertakers, council for burial, cremation and a wake, these costs are allowed by HMRC.

TheGreenFrog

https://forums.moneysavingexpert.com/discussion/comment/82068789#Comment_82068789

Costs will be printing, flowers, church fee, venue hire, refreshments and catering staff. It is not a funeral so there are no undertakers, cremation/burial costs or wake. Only funeral costs are specifically allowable, but am unsure of exact status of memorial costs.

mybestattempt

https://forums.moneysavingexpert.com/discussion/6676062/memorial-service-costs-iht-deductibility

I think if that was the case then the guidance would say so.

The legislation refers to "reasonable funeral expenses" and a funeral is an event which takes place at the time of the disposal (final disposition) of the body not some unspecified time afterwards.

That said, it is possibly be a situation where HMRC might exercise some discretion on a without prejudice basis.

silvercar

When I lost a parent, the cost of the stone on the grave was allowed. This was months later and we had a memorial service at the time.

TheGreenFrog

https://forums.moneysavingexpert.com/discussion/comment/82068936#Comment_82068936

Thanks - was the cost of the memorial service claimed/allowed?

silvercar

https://forums.moneysavingexpert.com/discussion/comment/82069223#Comment_82069223

From memory it went in as one item, headstone including service etc. And was accepted. But this was the first of a couple to go, so there wouldn’t have been IHT as most or the estate was left to spouse.

sherlock228

https://forums.moneysavingexpert.com/discussion/comment/82068819#Comment_82068819

That said, it is possibly be a situation where HMRC might exercise some discretion on a without prejudice basis.

Since what HMRC actually say is: "You should seek advice where any claim to deduct the cost of a separate memorial service is made" then I you are 100% on the mark. That sadly does not help OP other than basically suck it and see….

IHTM10374 - Funeral expenses (box 81): memorial services - HMRC internal manual - GOV.UK

Dead_keen

The legislation says:

In determining the value of a person’s estate immediately before his death, allowance shall be made for reasonable funeral expenses.

The bit of the manual you quoted says:

You should seek advice where any claim to deduct the cost of a separate memorial service is made.

I guess the first question I would have it is was me is what does it mean by a "funeral", rather than a memorial service. The legislation does not say.

To me (and I've not researched this) a funeral is normally connected with the disposal of a body. A memorial service isn't. However, I could see other situations that might be included in a normla definition of a funeral (e.g. if there is no body but a coffin).

It's possible to have a funeral and/or a memorial service and there will be costs associated with both. The funeral expenses (to the extent that they are reasonable) reduce the value of the estate. What is the underlying policy associated with that? I haven't researched it. Presumably, though, the public policy is that it is important for the body is disposed off properly, and it make sense that the estate pays for that. A memorial service is optional though, and lots of families do not have them.

So I can see that it makes sense for Parliament to haved allowed a deduction for funeral costs and not memorial services. If that was the end of the story though, why would HMRC's manuals just say that no deduction is allowed for the memorial services? I don't know. But I can imagine that there are circumstances where the body is not available to have a funeral (e.g. lost at sea) and so a memorial service might serve a very similar to a more inclusive definition of a funeral. That might be the answer, or it might not be.

To the OP, if the body was just disposed of without cermony, I can't see any obvious reason why the costs of a memorial service will reduce the value of the estate. It's not what the legislation allows. But it may be that the actual facts would change my personal view. Although, of course, my personal view is completely irrelevant.

sherlock228

https://forums.moneysavingexpert.com/discussion/comment/82070814#Comment_82070814

you are correct that the legislation does not define a funeral and that HMRC's manuals are, unless expressly stated, merely their interpretation of the law, rather than a summation of the law.
Nonetheless HMRC manuals do differentiate between a "funeral" expenses and "memorial" expenses.

IHTM10000 - IHT accounts and accountability: contents - HMRC internal manual - GOV.UK

It seems to me that if OP can show negligible funeral expenses then "reasonable" memorial expenses would fall into HMRC's discretion as referenced in the single line already quoted

IHTM10371 - Funeral expenses (box 81): introduction and general approach - HMRC internal manual - GOV.UK

The deduction of reasonable funeral expenses is specifically allowed under IHTA84/S172.

Funeral expenses are included in box 81 of the IHT400. Taxpayers are asked to provide a breakdown of the expenses.

You should generally accept the deduction claimed without enquiry unless the expenses seem to be

• wholly unreasonable or large in relation to the estate as a whole, or
• inconsistent with information on the file.

Dead_keen

I have no skin in this game.

I can see that HMRC's manual refer to the expense of a memorial (like a plaque in a church), but that seems to me to be different to a memorial service.

It seems to me that if OP can show negligible funeral expenses then "reasonable" memorial expenses would fall into HMRC's discretion as referenced in the single line already quoted

I'm not sure I understand that. Let's say someone rich and famous dies and they want a simple funeral (a very reasonable £799) and their family wants a memorial service (a very reasonable £50,000, bearing in mind their fame and wealth), why should that £50,000 be deducted just because there was a cheap funeral. If they'd had a more expensive funeral (say £5,000) would that stop the £50,000 being deducted in your view?

And when you say discretion, HMRC don't have discretion to give an extra, non-statutory reduction in the value of the estate. The manual seems all about telling the HMRC officer to take a sensible approach and not quibble about, for example, buying flowers from M&S and put in the church rather than the flowers only reducing the value of the estate if they were bought from Lidl and, only then, f they were actually placed on the coffin.

But as I say, I have no skin in this game and have not researched it.