The 60 day tax limit during which HMRC can investigate tax paid on an estate has been scrapped. Instead they will focus on taxpayers who have made gifts before their death, giving them more time to conduct their investigations. Currently gifts made within seven years of death are subject to inheritance tax and HMRC are focusing their attention on ascertaining whether gifts are made during this period. This is subject to the annual exemption of £3000 and other exemptions for small gifts and those given on specified events. This means that many families may find themselves subject to high probate costs ensure that investigations are carried out thoroughly.
Once the value of a gift is fixed no account is taken of any decrease in this value unless relief is available under s.191 of the Inheritance Act 1984 which requires that land is sold within 4 years of the date of death for less than the probate value. The relief is not automatic and must be claimed by the personal representatives. A comparative relief is available to certain investments such as quoted shares and units trusts, which are sold within 12 months of death.
