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If you would like advice relating to a taxable estate, don't hesitate to get in touch with the Wills, Trust and Probate department at Myerson
One of the questions we frequently get asked is when inheritance can be distributed to the beneficiaries of a taxable estate. One of the key steps is to obtain the green light from HMRC.
In a taxable estate, personal representatives must be satisfied that HMRC will not raise queries about the IHT 400 application before making final distributions. This is a sensible approach as the personal representatives could be held personally liable for monies owned if they distribute without ensuring matters are finalised with HMRC.
When submitting the IHT400 to HMRC, we always aim to be as thorough as possible to ensure that the application goes through as smoothly as possible. However, HMRC are entitled to raise queries, and it is common for them to refer a valuation of land to the District Valuer’s Office for confirmation. Accordingly, we are never able to guarantee to personal representatives that HMRC will not raise any queries.
Getting the green light from HMRC has been difficult in the past as the Inheritance Tax department often has a large backlog of cases to deal with. HMRC have amended their processes over the last few years in an attempt to assist personal representatives.
The process is now as follows:
This process helps to strike a balance between allowing HMRC time to thoroughly review applications whilst also preventing unnecessary delay in progressing the probate application.
After the 12-week period has passed, personal representatives can assume that HMRC does not have any queries to raise and can begin to distribute the estate if in a position to do so.
If you would like advice relating to a taxable estate, don't hesitate to get in touch with the Wills, Trust and Probate department at Myerson