15 May Don’t Find Out The Hard Way! Inheritance Tax Investigations Net Hmrc A Record Sum
Inheritance tax (IHT) is a levy that is paid on the value of an estate when someone passes away. The tax is generally paid by the beneficiaries of the estate, but it can also be paid by the executors of the estate. Recently, HM Revenue and Customs (HMRC) announced that it has collected a record sum of money from IHT investigations. This revelation is a reminder that it is important to be aware of your IHT liabilities and to plan accordingly to avoid any potential issues. Luckily, this post will ensure you Don’t find out the hard way! Inheritance Tax Investigations Net Hmrc a record sum.
The amount of IHT that is due on an estate depends on the value of the estate and the relationship of its beneficiaries to the deceased. There are a number of exemptions and reliefs that can reduce the amount of IHT that is due, such as the nil-rate band, which is currently 325,000 euros. However, it is important to note that the nil-rate band is set to decrease substantially for deaths occurring on or after 6 April 2022.
One of the main reasons why HMRC conducts IHT investigations is to ensure that the correct amount of tax has been paid on the estate. This can include checking all assets have been properly valued and that all exemptions and reliefs have been correctly applied. In addition, HM Revenue and Customs may also investigate if there are suspicions of tax evasion or fraud.
It is important to be aware that HMRC has the power to investigate estates up to four years after the date of death and in some cases, six years for serious fraud cases. This means that even if an estate has been settled and the beneficiaries have received their inheritance, HMRC can still open an investigation.
It is important to seek professional advice when dealing with an estate to avoid any potential issues with HMRC. A solicitor or accountant can help to ensure that all assets are properly valued, that all exemptions and reliefs are applied, and that the correct amount of tax is paid. Also, these experts can help to ensure all the necessary paperwork and documentation is in order.
The recent announcement from HMRC on the record sum collected from IHT investigations serves as a clarion call to establish your IHT liabilities and to plan accordingly. Early identification of such liabilities will shield you from any potential issues with HM Revenue and Customs. Luckily, you can seek professional advice and ensure all your assets are properly valued, verify if all exemptions and reliefs are applied and that the correct tax is paid.