Inheritance Tax Refund due?

If an estate comprises of property and/or shares executors should consider whether there is any availability to claim for loss relief on a subsequent sale.

Where the reported and agreed value for inheritance tax purposes is more than the actual sale value (by at least £1,000 of 5% of value on death) then it is possible to claim a refund for the overpaid inheritance tax.

Naturally queries will be raised as to why the sale price is lower, especially in circumstances where the property has sold to a beneficiary and it should be noted that a claim can not be withdrawn in circumstances where it later proves disadvantageous, but with appropriate consideration could result in a refund to the estate and thus increase the value that can be distributed.

For the unwary, there are timescales that have to be complied with - to qualify for the relief on loss of sale of property, the sale must occur within 4 years of the date of death and the claim submitted within 7 years.  For shares, the qualifying investments must be sold within 12 months of the date of death and the claim submitted within 4 years. It is also important to note that in connection with the sale of shares, all sales have to be reported, not just those which resulted in a loss.

Link to related article: www.which.co.uk/news/2019/11/over-4500-people-got-an-inheritance-tax-refund-last-year-could-you/