Corrective Account, RNRB and TRNRB and Tapering

Trusts Discussion
1

I am dealing with a taxable estate and we will shortly be lodging an IHT Corrective Account to the IHT400 originally lodged with HMRC as certain assets have emerged since the IHT400 was lodged and some other debts as well. When the IHT400 was lodged, I had not claimed the RNRB and TRNRB. The deceased died less than 1 year ago so we are well within the 2 year period and I intend to claim these (RNRB and TRNRB).

The estate, even with the Corrective Account, will be more than £2 million and the tapering provisions will apply to our claim for the RNRB and TRNRB.

I called HMRC to ask for confirmation that when calculating how the tapering provisions to our claim for the RNRB and TRNRB, that they will consider the IHT400 alongside the Corrective Account. They lady that I spoke to at the Revenue said that they would not consider the Corrective Account! I was told that the tapering provisions would only apply for the figures as returned in the IHT400. I asked her to point me to the guidance/relevant sections of the legislation that states that that the Revenue would only rely on the IHT400 and she could not. She said that they were told that that is the way to do it and if I objected, I should write in!

Surely that can’t be right. Can anyone help?

My other query is this. Am I right in thinking that if the estate claims Loss on Sale of Shares Relief (as the executors have sold shares for a loss), that in claiming the RNRB and TRNRB and tapering these, we cannot use the revised value of qualifying investments sold at a loss?

Many thanks.

Nelissa Hicks,
Knights Plc

2

HMRC are talking nonsense. Put in the corrective with written application for clearance and pursue vigorously.

I believe they are probably correct about the relief as the taper is calculated without reference to reliefs.

Simon Northcott

3

I agree with Simon - that cannot be correct!

I suspect (although I have not come across it in practice) that the taper threshold would apply to the date of death value of the shares, and hence you will not be able to use the loss relief to reduce the taxable value of the estate for the purposes of the taper threshold - they are two distinct issues/tests.

Joe Cobb
JMW Solicitors LLP