Figures obtained from a Freedom of Information request for 2019/2020 show that HMRC is now investigating 1 in 4 estates that pay Inheritance Tax. HMRC took in £274m from 5,638 Inheritance Tax investigations which is the highest amount in four years. The investigations mean that HMRC yielded an average of nearly £50,000 per investigation carried out.

Families who have innocently underpaid Inheritance Tax (IHT) due to misunderstandings over the complex and technical tax rules are finding themselves the subject of these investigations. Many are being faced with requests to pay back what can amount to very large sums of money.

One Wealth Advice Manager explained that “in many cases people are falling foul of a technicality or have misunderstood the rules and aren’t deliberately trying to underpay death duties.”

It seems that where family members carry out all the probate work themselves, a common area for misinterpretation of the IHT technicalities involves the gifting of homes and other assets for tax purposes. The inherent fluctuations in the property and stock markets can lead many to mistakenly provide incorrect figures when calculating the IHT due.

There have been many cases put forward to date arguing for simplification of Inheritance Tax to prevent these errors from happening, but so far, any changes are yet to materialise. The latest proposals put forward have instead been for an increase in IHT to help fill the large hole in the nation’s budget caused by the pandemic.

To avoid potentially costly liability down the line, it is always advisable for anyone who becomes an executor of an estate to seek legal advice from a professional Probate Specialist. As with many things, it can save significant stress, cost, and time to get it right from the beginning.

At Gorman Legal, our Specialist Probate Service is pleased to help people in Devon and beyond. We save you the stress and hassle. Please remember you can provide us with instructions by phoneonline or in-person.

If you or anyone you know would benefit from our help and advice with Probate, make a Free Enquiry to Gorman Legal today.

 Call us on 01884 216106 or contact us via our website www.gormanlegal.co.uk.