HMRC delaying issuing Code where gifts involved

We have now had a couple of cases where HMRC have been slow at issuing the code for probate where the IHT400 has gifts reported. On one the lifetime gifts were more that the available NRB’s so tax is payable on those gifts but on the second the gifts were within the available NRB’s. The explanation on both has been that the return has had to be referred for review of the gifts before the code could be issued and the last case (where the return was sent in just over 2 months ago) we have been told that the delay is because they do not have enough staff trained to deal with the lifetime gifts element.

My understanding was that it should be a process now check later system. If they are going to start looking into elements of the return before issuing the code this is going to cause even more delays.

Has anyone else experienced this?

I had the same explanation recently from HMRC. It took HMRC about two months to issue the code, despite telephone reminders from me.

Anthony Kalp
Berry & Lamberts LLP

I would be very cautious about any explanations of this type proffered by HMRC on the phone but more inclined to believe them if in writing. This is the outfit just recently awarded a £50m WFH subsidy for better customer service.

There is a certain amount of interesting procedural info in IHTM sections 05000 and 29000 but no hostages to fortune as to turnaround times. However a reading of 05051 would lead one to believe that the filing of an apparently in order IHT 400 with HMRC plus payment of tax calculated on behalf of the estate (so not requiring HMRC to do it) should elicit a code as soon as they have verified payment. “In all cases, there is no need to wait until the Probate Registry have issued the grant before dealing with the case, such as referring to the District Valuer (IHTM23002), raising enquiries (IHTM29011) with the taxpayer or, if appropriate, closing the case.”

Risk assessment is carried out on all accounts but IHTM29031 does not clarify if that is done, and any enquiry found to be merited, before a code is issued or after as 05051 suggests in the quote as regards raising enquiries. Your experience suggests that it is not or not always. My view is that providing the code is a perfunctory administrative task and should only be preceded by a risk assessment, which one hopes is done by some method closer to AI than by parchment and quill. How many accounts require “close investigation” and how many of those are so critical, e.g. as to lifetime gifts, that they cannot be subjected to “file first process later”?

No doubt we can’t expect HMRC to reveal its internal MO but if D403 looks to be completed correctly presumably HMRC are not going to write back saying “Are you a crook?” or *PS. This is a fishing expedition". No doubt they have some selection parameters, and existing info on file for cross-checking, and a usual suspects flag or filing cabinet(s). If they want more details in advance they can ask for it. They don’t seem to require much advance detail with Forms 100 etc and the deceased is not likely to abscond before any additional tax falling due is paid. How long do they think it appropriate to hold up probate by a protracted investigation into gifts, obtaining info they could have requested by a form, that may yield no additional tax? Being as charitable as possible their under-resourcing is a matter between them and HMG. What we need is corresponding reverse penalties for delay payable to the taxpayer.

Jack Harper

It seems that HMRC are changing the process again (notably to one that causes greater delay for the PRs) without any explanation or publication.

We were told that the new system was to prevent applications being made prematurely (which in itself was stupid because, once scanned, why couldn’t they just be held awaiting the 28 day deadline). We were not told that the system was reversing the long standing “issue then scrutinise” system.

Why change to a system that requires more (or more rapid) HMRC resourcing then excuse delay by lack of sufficient resource…?

Is this something that ICAEW, STEP or the LS can take up with HMRC? At the very least, HMRC should be publicly confirming what they actually do when they receive the account and whether they are still aiming to issue codes within the 28 days expected under the prior system (I hesitate to say “old” system as it is changing so rapidly).


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I wasn’t sure if this was a change on procedure or whether we had just been unlucky.

I agree with Jack that penalties against HMRC would be fair

At the moment I am receiving codes very quickly, although none of the estates had lifetime gifts. Today I was pleasantly surprised to receive a code in an estate where I had sent the Inheritance Tax Account to HMRC on 2 May, just under two weeks ago, which was very quick. The estate was not taxable but there was a claim for a transferable nil rate band. I always send Inheritance Tax Accounts with a claim for a TNRB to HMRC by special delivery post, to ensure that I have a record of its receipt at HMRC because of the deadline.

On a separate but related point, in two non-taxable straightforward estates recently I received emails from a DPR telling me that HMRC had no record of having received an IHT400 in those estates. I do not believe that the post is that bad, as I have had no problem with the post otherwise, so I can only assume that the IHT400s in question were lost at HMRC’s scanning place. This suggests to me that I should send all IHT400s to HMRC by special delivery post, as it is very tedious having to “re-assemble” an IHT400 and send it to HMRC again. Has anyone else had an estate where HMRC denied having received an Inheritance Tax Account?

Cliona O’Tuama

I have just spent 36 minutes waiting for HMRC to answer and tell me when a unique code would be issued. Although the estate was not liable for IHT, a 400 had to be submitted to claim RNRB. Although, HMRC raised a minor query, this was replied to on 28 March so that allowing for a few days for that letter to get to the officer involved, some 37 working days have now elapsed. I have now been told that they will send a message to the officer and we should receive the code in 10 working days. I must confess that I had been under the impression, wrongly, it would seem, that unique codes would be dispatched within 20 working days. The way things are going, it looks as if HMRC will be taking the same length of time as HMCTS takes to issue probate! I should add that the automated response in advance of speaking to the officer stated that 25 working days applies!

Patrick Moroney