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CTT clawback

19 May 2009
Issue: 4206 / Categories: Forum & Feedback , Inheritance Tax
An income tax investigation by HMRC has uncovered an undeclared capital transfer tax liability on a lifetime gift made in 1979. Can HMRC still assess this liability or is it out of time because more than 20 years have elapsed?

We recently finalised a tax investigation in relation to a failure to disclose interest on an offshore bank account.

The source of the capital in the account (approximately £100 000) was a gift made to our client by his father back in 1979. The father died in May 1987 his wife having pre-deceased him many years earlier.

The father was a working farmer at the time of his death and apart from the £100 000 gift the only other assets of significance would have been the farmhouse and farm lands (estimated value £150 000). There were as we understand it no other lifetime gifts.

While we did not act for the father it is our understanding that no return was made to the Revenue in relation to the lifetime gift and furthermore that an estate return was submitted at death showing nil tax payable.

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