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Inheritance tax loss refunds on the rise

Executors claiming refunds on losses they made when selling inherited assets is on the rise.

Under a little-known rule, executors can claim inheritance tax refunds where they make a loss on  the sale of inherited assets, including shares, gilts, trusts and property.  This can be particularly useful in uncertain times when the value of shares can decrease significantly between the date of an individual’s death and the date the shares are sold.

Refunds from the sale of trusts etc can be claimed for up to 12 months following a person’s death. This is extended to a maximum of 4 years for the sale of property.

HM Revenue and Customs reported that there were almost 1,000 more claims during 2019-20 compared to the previous year.

Katy Burgin, specialist wills and probate solicitor commented: “People are becoming more aware that they can reclaim overpaid inheritance tax. We anticipate this will rise even further in the coming year as more and more families take advantage of the tax reliefs.”

IHT is payable on the value of an individual’s total estate at their death. Under normal circumstances, the tax payment is due within six months of the death and the estate cannot be formally handed over to the heirs until the tax has been paid.

For estates greater than £325,000, tax is charged at 40 per cent. Estates below that threshold are tax-free. Where a couple inherit, they may be able to combine their allowances and also take advantage of an additional allowance for their property.

If you need professional advice on any aspect of wills, probate, estate administration or IHT, contact our friendly professionals. Call 01302 320621 or email info@athertongodfrey.co.uk

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