A recent report investigating the matter has stated that thousands of people in the UK are entitled to an inheritance tax rebate, with around £90 million in tax having been overpaid in the last for years. The money is lying in government coffers waiting for individuals to claim it back as many executors have not realised they could be eligible for a rebate. NFU Mutual has released figures which suggest that an average of £4,260 across 21,000 estates is due to be refunded to people.

Inheritance tax is calculated on the basis of the value of the estate at the time tax is due to be paid. Inheritance tax is paid within 6 months of the date of the deceased’s passing. Should the property be sold for less than its valuation within 4 years of the valuation you will be entitled to claim back the inheritance tax on the difference in values of the estates. Given the massive drop in house prices over the last 4 years, there are many people in this position, and many people are not fully aware of this fact. The Land Registry puts a figure of 11% on the drop in house prices, putting thousands of properties into this category.

Not only is residential and commercial property subject to this drop in value, but also stocks and shares. If the valuation of the shares at the time of the payment of inheritance tax is higher than the amount they sell for, again you will be able to claim for a tax rebate.

How To Apply For A Rebate

Individuals who inherited between the dates of June 2008 to February 2009 and June 2010 to August 2011 are in the most lucrative position and are most likely to be able to claim for a rebate as in these time periods house prices dropped most steeply.

Should you feel you may require a rebate, you should contact HM Revenue and Customs directly. They will be able to give you guidance of information you need to supply to support your claim, and the likelihood of you being eligible. A form for those who think they have overpaid on inheritance tax is readily available on the HM Revenue and Customs website. The relevant form is an “IHT38 – Claim for relief – loss on sales of land” for residential properties and an “IHT35 – Claim for relief- loss on sales of shares” for stocks and shares.

Contact Us

Roskell Davies specialise in probate law, contact us today if you need advice about probate or inheritance tax. All initial enquiries are free, fill in an online enquiry here or call 0800 142 2901.

Share Article With: