When someone dies it is not always necessary to instruct a solicitor to assist with the administration of their estate. Indeed, many people choose to administer estates themselves without instructing professionals to assist them and do so successfully.
However, even where an estate appears to be straightforward, there may be elements that are being overlooked which could lead to inheritance tax being underpaid or, in some instances, not paid at all.
HMRC has substantial investigation powers if it suspects inheritance tax has been underpaid through error, omission or by undervaluing assets.
Last year, between April and November, HM Revenue & Customs opened over two thousand investigations and recovered over £170 million in underpaid inheritance tax.
In addition to recovering the underpaid inheritance tax HM Revenue & Customs also charges interest on the late payment of inheritance tax due. Interest is currently charged at 2.5% above the Bank of England base rate, so it is currently being charged at a rate of 7.75%!
One of the main areas of investigation is lifetime gifts made by the deceased in the 7 years before they died which may be inadvertently overlooked.
If you would like advice in administering an estate please contact the Private Capital team at SE-Solicitors who will be pleased to assist and provide you with the right advice to ensure that any inheritance tax due is correctly calculated.
HMRC investigates over 2,000 families for inheritance tax shortfallshttps://todayswillsandprobate.co.uk/hmrc-investigates-over-2000-families-for-inheritance-tax-shortfalls/