Inheritance tax interest charges
I read the article by Victoria Alicea entitled ‘Inheritance – get it right’ (Taxation, 29 May 2025) with interest and believe it is worth mentioning the inclusion of provisional figures.
In my experience, generally the taxpayer will try to complete the IHT400 and schedules and pay any tax due before the six months has elapsed (other than where it is intended to pay tax by instalments). In that scenario it is possible that not all the asset details or valuations will be to hand and so it is vital that the person completing the IHT400 pays attention to and carefully completes the box on page 13 of the form where HMRC invites the person who will sign it to state the boxes where the figures are provisional. By taking this step the taxpayer should reduce as far as possible the chance of receiving a penalty for providing an incorrect account or information. A corrective account will be required.
Paul Masters,
Solicitor.
More carrot, less stick?
I was interested in Andrew Hubbard’s column (Taxation, 19 June 2025) saying that HMRC is viewed as an institution with a power imbalance.
Many years ago in the days of districts, our local FSB were asked to put up a speaker to a regional training meeting of inspectors. I ended up presenting, on the subject of the views of a taxpayer.
I remember saying:
- Most taxpayers try and get it right.
- Clients are genuinely scared of a Revenue investigation.
- All meetings should be conducted with the premise that the Revenue have the power.
- Often they will give answers that they think you want to hear, even if the truth would give a better result for them.
I think the majority of the Inspectors were surprised by my comments. I always remember the significant minority smirking, clearly enjoying what I was saying.
I guess this must have been more than 20 years ago, yet this one presentation I will never forget.
Barry Jefferd.
It’s flat and we love it!
When writing the article about the VAT flat rate scheme (FRS) (5 June 2025), Taxation asked HMRC if there were any plans to review the efficacy of the scheme. In response, an HMRC spokesman said: ‘We regularly commission independent research on all aspects of the tax system and we recognise that this scheme still offers benefits to users.’
Noting that the research was conducted under the previous government, HMRC said it had been commissioned after a reduction in the number of businesses using the FRS, adding that ‘changes to the scheme and the introduction of making tax digital for VAT may have contributed to the reduction’. However, the research gave ‘assurance that the FRS still provides support and simplification for users and recognised a small financial advantage for some’. Finally, HMRC highlighted more recent data from November 2024 – the annual UK VAT statistics 2023-24 – shows the population has reduced further to 162,000.
Allison Plager.
HMRC’s comment is included in the online version of the article on taxation.co.uk.
Forum feedback
Following feedback from readers to my reply to query 20,535 (‘Thinking about the future’, Taxation, 26 June 2025), I have looked again at my answer to the question on use of the husband’s nil rate band.
I have realised that I overlooked one point. The ability to transfer the residence nil-rate band (RNRB) does not depend on whether the first spouse held a qualifying residential interest. Instead, the test is whether the first spouse used any of their RNRB. If none of it was used, the unused percentage can be transferred to the surviving spouse’s estate – regardless of whether the first spouse had a QRI at the time of their death. Apologies to any reader who was misled.
KC.
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