HMRC Inheritance Tax Investigation

Our Tax Investigations & Dispute Resolutions team assisted in closing a long-running Inheritance Tax (IHT) enquiry into the Estate of our client’s deceased  mother. By completing a detailed case review and collating a comprehensive response to HMRC, we were quickly able to close the enquiry and displace HMRC’s assertion that up to £300,000 IHT was payable.

A potential client was referred to Simmons Gainsford LLP’s Tax Investigations & Dispute Resolutions Team. The client was the executor of a parent’s Estate had entrusted his family’s lawyer to progress an HMRC Inheritance Tax enquiry, which had been running for over two years prior to our initial discussion. As the investigation had been running for such a period, our client sought specialist advice in order to find a way to move the enquiry to closure.

Following Simmons Gainsford’s engagement, our team conducted a detailed and thorough review of case correspondence and supporting documentation to identify the main areas of dispute.

Whilst the Estate itself did not appear to be complex as the main asset was a sole UK rental property, the HMRC officer was asserting that approximately £300,000 additional Inheritance Tax was payable. The two main issues were the deductibility of a number of loans to the deceased in her final years by her two sons, and the proportion of property ownership chargeable to the deceased.

Once we had a firm understanding of the dispute, we discussed matters with our client in detail to explaining the current position and gain further background. As HMRC had raised a protective charge on the property held by the Estate, the assets were still unable to be distributed.

Our team prepared a comprehensive response to address all open disputes. We identified deficiencies in HMRC’s position and arguments, and provided extensive arguments supported by relevant case law and additional documentary evidence.

Our response addressed and satisfied all risks that the HMRC officer was concerned with. HMRC agreed with the position that we laid out and swiftly closed the enquiry with no additional tax payable by the Estate.

By conducting a detailed review of the matters in hand, working closely with our client, and tailoring a comprehensive response to HMRC, out team was successful in closing a long-standing investigation with a single piece of formal correspondence.

This case highlights how HMRC investigations may sometimes grind to a halt and that a fresh set of expert eyes may help bring matters to a close. It also highlights that HMRC are willing to listen and change their mind on their assertions once detailed arguments and supporting documentation is provided.

Our client was ecstatic with our successful result and that that the assets of the estate could now be distributed following such a long dispute and shared his thoughts, below;

 

Well done to you and the team, you have our appreciation and highest respect for the efficiency, expertise and professional way the whole matter has been handled.”

 

 How can Simmons Gainsford help?

Our team includes many specialists and ex-HMRC personnel. We are able to undertake a review of your specific circumstances and advise on how to navigate through complex HMRC enquiries.

If you require assistance, please do not hesitate to contact the head of our Tax Investigation and Dispute Resolution Team, Anthony Rose on Anthony.rose@sgllp.co.uk or telephone 020 7447 9000.

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