I should be grateful for the thoughts of the forum on the following.
I have an Estate in which a property was gifted by Will to family beneficiaries, subject to Inheritance Tax. The family paid the requisite tax to HMRC, with no Estate funds being used.
The property was then transferred to the beneficiaries, before subsequently being sold by them at a significant loss. We have attempted a claim for loss relief by HMRC, but it has been rejected on the basis that the property was transferred before the sale, hence the Executor cannot claim as the “appropriate person”. They have quoted s.190(1) IHT84 and IHTM33050.
In normal circumstances I would agree with HMRC’s viewpoint, but my question is whether any difference comes from the fact that the beneficiaries paid the tax in the first place, not the Executor. s.190(1) IHT84 states that: “the appropriate person” [is] in relation to any interest in land comprised in a person’s estate immediately before his death, means the person liable for [inheritance tax] attributable to the value of that interest or, if there is more than one such person and one of them is in fact paying the tax, that person (my emphasis). I am therefore questioning the value of an appeal with HMRC.
Has any member of the forum succeeded (or indeed failed) with an appeal in similar circumstances?
Blandy & Blandy LLP