New asset for old estate

Pamela,a spinster ,died in 1992and her estate was wound up ages ago. It has recently come to light that she has a small minority holding in an unquoted investment company,worth maybe £30,000. The same applies to her sister Mary who died 5 years ago.
Her executors need informing and the assets gathered in and distributed to beneficiaries,some of whom themselves have died! IHT and interest (penalties?) and legal fees will need settling so there may be little or nothing left for beneficiaries st the end of day.
Can anyone see an easy/easier way out!

Richard Holme

I will leave it to others more experienced in succession legality to
perhaps comment on the best approach to bringing matters up to date in the
most cost effective manner but as regards any tax liabilities don’t
overlook the fact that it is the value of the shares when Pamela { and also
Mary who died in approximately 2011/12 ) died in 1992 that needs using to
calculate whether or not an IHT liability arose.

In 1992 the value will probably have been far less than £30K (assuming this
is the current value) especially if it was a small minority holding and
there is a substantial majority shareholder… Especially if shareholding
has only just come to light because of a recent sale of the company ( or
distribution following on to a winding up of the company after sale of the
only company asset)

There might also have been restrictions in the company articles on share
transfer which would have reduced the market value of the minority

As a starting point I suggest you make enquiries regarding all
shareholdings held/ company articles restrictions and possible market value
at dates of death

Andrew M Mortimer

S.240 Inheritance Tax Act will be relevant in respect of Pamela’s estate
and, depending upon whether HMRC considers Mary’s personal
representatives made sufficient, reasonable enquiries, perhaps also on
Mary’s death.

S.240 may also apply in relation to the deceased beneficiaries’ estates,
although not if they have died within the last 4 years (and maybe
longer, depending upon the circumstances).

If HMRC accept s.240 applies, no IHT charge arises, and no penalties
will be due.

In order to gain the protection of s.240, you will need to make full
disclosure to HMRC, including an explanation as to why the asset had not
previously been identified.

I have relied upon s.240 on a number of occasions and recommend it is
claimed specifically, rather than assuming HMRC might allow it

Paul Saunders

Whilst not on the whole amount, Business Property Relief at 50% would likely be available wouldn’t it?

Paul Storrie
Storrie & Company

If it is wholly or mainly an investment company, it won’t qualify for Business Property Relief as investment activities are not ‘qualifying trades’.

Jill MacMahon
Thackray Williams LLP