It has recently been reported by The Daily Telegraph that almost 15,000 families, over the past five years, have applied for inheritance tax refunds from HMRC after homes have sold for less than anticipated.
Overpaid inheritance tax
As death duties (the tax levied on property after the owner’s death) must be paid before probate is granted, this means a property must be valued before being sold.
This can often lead to estates paying too much inheritance tax and having to reclaim the overpaid amount if the property sells for less than it was originally estimated.
Increase in inheritance tax refund claims
The increase in IHT refund claims is apparently down to falling/stagnant house prices.
In 2016/17 there were 2,177 claims for refunds on the basis of loss on the sale of a property. This is 7% more than two years earlier, when there were 2,037 claims, according to official figures obtained by pension and insurance firm NFU Mutual.
Between April and December 2017, there were more than 2,500 claims, proposing the full 2017/18 tax year will have the highest number of refunds since the financial crisis.
‘If you feel you have a claim for overpaid Inheritance Tax and are due a refund as a result of a property selling for less than its originally estimated value, then please call us on 0151 264 7363 for expert advice’.
Natasha Booth, Head of Private Client
Paul Crowley & Co Solicitors
‘If you feel you have a claim for overpaid Inheritance Tax and are due a refund as a result of a property selling for less than its originally estimated value, then please call us on Calculating inheritance tax refunds
Here is an example of how a refund is calculated:
If a house was valued at £250,000 but sold for £240,000, the estate would be due a £4,000 rebate. IHT is charged at 40pc on assets worth over £325,000 per person (an additional £125,000 per person can also be claimed in regards to a family home).
The number of claims is expected to continue to rise as the housing market remains subdued.
Read the full article, here.
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