HMRC Out of Time to Raise Further Questions

I am acting in an estate with claims for RNRB and APR. On their IHT calculation HMRC stated, ‘that if you have not heard from us by 25th May 2020, you can assume we have no questions’. I submitted IHT30 application for clearance on or around 25th May. On 11th June 2020, HMRC issued a letter stating that they were going to be carrying out a check of the IHT400 submitted. Subsequently, HMRC has refused the RNRB and APR claims and referred the valuations of property and land to the District Valuer. When I challenged the Compliance Officer that HMRC were out of time to check the IHT400, I was told, that given COVID-19, the time limit was in effect flexible. Has anyone experienced anything similar? Is the 12 week time limit of HMRC to raise questions enforceable?

Wendy Randall
Hillyer McKeown LLP

The first point I would make is a question - when was the initial correspondence advising of the 25th May 2020 date sent to you?

The second point relates to the wording of their correspondence - the lack of questions does not necessarily assume agreement, does it? I am aware of the ‘new’ policy published in HMRC’s Trusts & Estates Newsletter on 16 April 2018. However, HMRC’s internal manual Compliance Handbook states, per CH53300:

Assessing Time Limits: Extended time limits: 6-year time limit

The 6-year time limit only applies for income tax, capital gains tax, corporation tax, inheritance tax (where an IHT account has been delivered and payment made and accepted in full satisfaction of the tax due), stamp duty land tax, stamp duty reserve tax and petroleum revenue tax.

An assessment (or IHT action) to recover under-assessed or over-repaid tax can be made within 6 years of the end of the relevant tax period where the under-assessment or over-repayment is due to the careless, see CH53400, behaviour of

  • the person, see CH51600 or
  • another person acting on their behalf, see CH53200.

The 6-year time limit does not apply where the tax to be assessed as a result of a person’s careless behaviour is VAT, insurance premium tax, aggregates levy, climate change levy, landfill tax or excise duty.

Michael Fogg

Thank you Michael.Kind regards Wendy Randall.

Wendy Randall
Hillyer McKeown LLP

I had something similar. Calculation issued confirming if you have not heard from us by…A few days before that expiry the DV got in touch (not HMRC). Dealt with DV and some months later HMRC raised other unrelated queries. I challenged this to be advised that the DV was an extension of HMRC so they had been in touch within the prescribed time limit. I disagreed. I suspect they are issuing these time limits without being able to process and comply with them. I wuold challenge in your case. There has to be some certainty of time limit after which you can distribute without fear of HMRC coming after you.

Justin Wallace
Brewer Harding & Rowe

Thank you for getting in touch Justin.

I totally agree, there has to be certainty.

I have challenged, because I had a deadline set by HMRC by which to do so…… the irony!

I will put the outcome on the Trust Forum

Kind regards

Wendy Randall
Hillyer McKeown LLP


1 Like

Hi Wendy,

Has there been any outcome to your challenge? I have a potentially similar case…

Thank you

Lucy Orrow CTA TEP
Lambert Chapman LLP

Hi Lucy,

They caved in. I quoted their own newsletter in which they set out the timescales solicitors could act by. If you need any help, let me know.

Kind regards

Wendy Randall
Hillyer McKeown LLP