Those who have inherited estates valued at close to any of the nil-rate band thresholds for inheritance tax will get an information letter from HMRC.
The UK tax authority is stating it wants bereaved families to avoid the additional stress of fines caused by tax mistakes. One of the most common causes of financial penalties is people with estates that are near the inheritance tax thresholds failing to fill out the form known as IHT 400.
This form runs for 19 pages and only has to be filled out for estates that are likely to be above the threshold. The most frequent mistakes arise from executors factoring in transferable allowances and the residence nil-rate band when determining if an estate is excepted or not. In particular, the allowances must be claimed via the IHT 400.
The fact that HMRC feels the need to do this shows again how confusing estate administration can be for non-professionals. This is why many people hire qualified Wills and Probate solicitors in North Wales to handle it.
According to Today’s Wills and Probate, a spokesperson for HMRC said:
“By not sending an IHT 400 when they should, estates may find later that incorrect calculations or out of time claims cause problems and they may face unexpected tax and penalties.”
Fines for not sending this form can rise to over £3,000, while inheritance tax has an annual interest rate of 7.75%.
At Bennett Smith Solicitors, estate administration is one of our areas of specialism. Call our team of solicitors in Porthmadog for help.
