A combination of British estate law and a stagnant housing market has resulted in thousands of families paying too much inheritance tax because of rules requiring the tax to be paid based on values calculated before the property is actually sold. Since 2013, Her Majesty’s Revenue and Customs has received refund petitions from 15,000 families who paid taxes based on calculated value but were then unable to actually sell the home for the amount that the tax estimate was based on.
- New figures obtained via a Freedom of Information request shows that stagnant and falling house prices seem to be the cause for a rise in IHT refund claims.
- Since the financial crisis, the full 2017-18 tax year will have the highest number of refunds.
- NFU Mutual says that refund claims will rise because beneficiaries of wills are keen to settle quickly and sell their properties for less their true value.
“In almost all cases this means property must be valued before being sold. This can lead to estates paying too much inheritance tax and having to reclaim the overpaid amount if the property sells for less than originally estimated.”
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