In some cases, HMRC may decide to look at an IHT400 form in more detail before issuing the IHT421. When this happens, HMRC will provide a deadline within which to complete their detailed checks. The process will continue as follows in these situations:
Weeks three to fourteen
It can take up to a further 12 weeks for HMRC to complete their detailed checks. This may involve:
- Conducting a more in-depth compliance check
- Asking the Valuation Office Agency (VOA) or Shares and Asset Valuation (SAV) to check the valuations provided in the IHT400
You will be informed if any of these checks are to take place.
HMRC’s deadline for resolving their detailed checks will fall within this week. If they do not get in touch with questions within this time, it’s safe to assume they do not have any queries about the information provided in the IHT400.
If they have not already done so, HMRC will usually issue the IHT421 at this stage.
Weeks fifteen to twenty
If HMRC have decided to conduct an in-depth compliance check earlier in the process, they will telephone to explain what is being checked. This should take place within 8 weeks of their letter informing us that the compliance check was going to take place. HMRC might also request more information to be sent to them and will provide a deadline for this. Anything agreed with HMRC in this regard will usually be confirmed by them in writing.
In the event that the VOA or SAV were asked to check valuations in the IHT400 – and they attribute a higher value to any of the assets in the estate – HMRC will provide new calculations by Week 20. HMRC do not normally get in contact with us about the valuations themselves, but they might do if an acceptable valuation cannot be negotiated between them and the relevant agencies.
Week twenty onwards
At this stage, we have to inform HMRC about any changes to the values of assets in the estate. We must do this either when those values are final, or when 18 months have passed since the date of death (whichever is earlier).
Before this deadline, we only need to tell HMRC of changes to the value of assets if:
- the changes relate to the value of land, buildings or unlisted shares
- land or shares have been sold at a loss
- assets on which you were paying tax by instalments have been sold
- the increase or decrease in the value of the estate is more than £50,000, before any exemptions or reliefs
- the person who died made a gift with reservation of benefit or had the right to benefit from a trust when they died
- HMRC are carrying out a compliance check on the estate
We will then need to calculate any additional tax and, if possible, place money on account to stop interest from accruing. HMRC will send us their final tax calculations when we tell them about these changes.
Once we believe that all the values in the estate are final and there will be no more changes to report, we will apply to HMRC (using Form IHT30) to issue a Clearance Certificate. Once issued, this confirms that all Inheritance Tax matters are now concluded for the estate.
HMRC will not normally issue a Clearance Certificate if less than a year has passed since the date of death.