I am dealing with an estate where husband passed away in 2011 and wife passed away in 2014. The son (who is also the executor) failed to make a claim for the TNRB within two years, as the house in which he was a joint owner passed by survivorship to him and there were no other assets which required probate and no debts to pay off. He continued to live in the house and assumed there was nothing further to do (he did not even update the Land Registry title to remove his mother’s name). Fast forward to today and our client is discussing his own Will with us and the topic comes up and we have advised him that IHT is payable. The client has instructed us to submit the papers and pay the IHT and we make an out of time claim for the TNRB. This has been rejected by HMRC on the basis that the executor’s lack of awareness of the two year time limit and lack of action in seeking legal advice is not sufficient reason to allow an out of time claim.
I have read the guidance in the manual (IHTM43009 - Claims and time limits: late claims - HMRC internal manual - GOV.UK) which deals with IHTA98/S8B(3)(b) and speaks in general terms of the types of events beyond the control of the person, but also speaks of where the claimant was ‘unaware’ and ‘could not reasonably have been aware of’ the need to make the claim. My question is:
Is anyone aware of any examples/case law when a similar claim has been allowed? Particularly, bearing in mind that the claimant has acted in good faith, submitting all papers and made a full disclosure on being alerted to the correct position; as well as the ability of the officer to utilise their discretion given the facts of the case.
Could a claim be made under IHTA98/S8B(3)(a) which deals with when the executor ‘first acted as such’ and gives them three months from this date to make a claim if it is later? (I have noted IHTM43007 - Claims and time limits: time limits - HMRC internal manual - GOV.UK and this seems to give scope to allow the executor’s scenario on the basis that a claim was made as soon as the executor started acting which I would argue was when we became involved/submitted the IHT papers in the matter.)
Any assistance would be appreciated.
I Will Solicitors Ltd