Client died in January 2021. She had been a member of a film production LLP that invested in a film in January 2010. This created a substantial loss for her on which Income tax relief was claimed.
HMRC launched an enquiry into her 2010 tax return and correspondence continued for a few years. The last such letter was our’s in May 2016.
We have just received a letter from HMRC offering us the opportunity to settle the outstanding enquiry by accepting that the loss should be disallowed. If we accept the “offer”, they will issue a closure notice and will conclude matters via a contract settlement.
I am aware that HMRC have up to 4 years post-death to raise an assessment (so 5 April 2025) but is there any limit as to how far back they can go? If there is such a limit, is this affected by there being an open enquiry?