Since my post earlier today, Malcolm Finney and I have exchanged views and agreed that my reference to a period of 12 months in relation to IHT on former joint property has no statutory support – perhaps HMRC was only being kind when that was discussed a few years ago.
However, when the situation in question does arise, I do generally recommend that HMRC be asked to assess the survivor direct for the IHT on the assets passing by survivorship (and this does happen). If the PRs pay the IHT then, as Malcolm says, they can recover this from the survivor – s.211(3) IHTA 1984 sets out the right of recovery. If need, they could initiate an action for recovery, although would need to be conscious of the cost implications of litigation. If litigation were to be considered necessary, the PRs should also consider asking the beneficiaries of the estate for an indemnity against the costs incurred.
Paul Saunders FCIB TEP
Independent Trust Consultant
Providing support and advice to fellow professionals