Have you claimed your inheritance tax refund?

With the coronavirus pandemic causing shares to plummet in price, it is important to be aware of your ability to claim an inheritance tax rebate if you are an executor or beneficiary of a taxable estate. If qualifying investments (primarily quoted shares and securities) are sold within 12 months of the date of death, at below probate value, you can claim an inheritance tax rebate.

The claim is made by completing an IHT35 form. All sales of shares within 12 months of the date of death must be included in the claim, whether or not a loss is incurred. This means that any gains made on shares will reduce the overall relief. It may for that reason be beneficial to hold back the sale of any shares which have increased in value since the date of death in order to maximise the overall relief on tax.

With many quoted shares having “taken a beating” during the COVID-19 pandemic, it is foreseeable that a significant number of these claims could be made. However, the availability of this relief is not well known and if you are a beneficiary of an estate, it is important to check with the Executor or solicitor dealing with the estate that this has not been overlooked to avoid missing out.

Furthermore, there is a similar type of relief available in respect of land which is sold below probate value within 4 years of the date of death. It is, therefore, important to ensure that those dealing with the estate are fully acquainted with the rules relating to inheritance tax. If you require advice on these or any other inheritance tax or estate issues, you should ensure that you seek advice from a specialist solicitor who is fully acquainted with inheritance tax issues.