Chapter 10: Dealing with His Majesty's Revenue and Customs (HMRC)

Question 1

When do PRs need to deliver an account to HMRC?

Answer 1

Within 12 months from the end of the month of the deceased’s death.

Question 2

In practice, when do PRs usually deliver an account to HRMC?

Answer 2

Usually before the 12 month deadline, as interest on the IHT due on the estate runs from 6 months + the PRs cannot obtain a grant until they have paid the tax due.

Question 3

What does a solicitor acting for PRs need to do?

Answer 3

Obtain details of the deceased’s assets and liabilities.

Question 4

How can valuations typically be obtained?

Answer 4

Via correspondence with institutions such as banks and insurance companies.

Sometimes expert assistance will be required from, e.g., accountants and surveyors to ascertain the open market value of assets at the date of death.

Question 5

If IHT is payable, what should be sent to HMRC?

Answer 5

1. The completed account
2. All necessary schedules
3. Payment

Question 6

Generally, what estates are exempt from IHT?

Answer 6

Estates of UK domiciliaries that don’t exceed:

1. The IHT threshold (NRB, £325,000),(small estate) or
2. £3 million, and the net chargeable estate (after deducting liabilities and any spouse/charity exemption on death) doesn’t exceed the IHT threshold (exempt estate).

Question 7

When is the estate of a deceased who was non-UK domiciled excepted?

Answer 7

If their UK estate consists solely or cash and/or quoted shares which don’t total more than £150,000.

Question 7

How can a person’s NRB be increased by their spouse?

Answer 7

Their deceased spouse’s unused percentage of their NRB can be transferred and added to the threshold.