Probate & House Valuations
Inheritance Tax
HM Revenue and Customs (HMRC) challenged nearly ten thousand probate valuations of land last year. This resulted in raising an additional £70m in inheritance tax charges.
New enforcement powers are being used by HMRC to investigate alleged under-valuations of property for probate. Personal representatives are being asked to explain what steps they took when getting an independent valuation. If HMRC decides that reasonable care was not taken, the estate and its beneficiaries may have to pay a penalty of up to 100% of the additional tax liability on top of the additional tax due.
The chief executive of STEP, David Harvey, commented “The extensive powers now available to HM Revenue & Customs pose a serious financial risk to lay executors who make honest mistakes when getting a house valued. That is yet another reason why personal representatives should retain a qualified practitioner to help them administer an estate of significant value or complexity”.
If you would like expert advice from one of our specialist lawyers regarding acting as a personal representative and the administration of estates please contact us.