Bereaved families don’t get inheritance tax refunds – here’s how to apply



This comes as more and more people are expected to be captured by IHT. Nearly 33,000 estates will pay the death toll this tax year, according to forecasts from the Office for Budget Responsibility, the official forecaster. This will mark a jump of 50pc out of the 22,100 who paid in 2018-19.

A five-year freeze on tax breaks announced in the March budget, combined with inflated house prices and rising costs of living, will cause the government to levy the tax to a record £ 6bn sterling by the end of the year. , reaching £ 6.6 billion by 2026, as shown in the charts above.

Everyone has an IHT allowance of £ 325,000, as well as an additional allowance of £ 175,000 which applies when passing a primary residence to a direct descendant, known as the family household allowance. or “zero rate band for the principal residence”.

Spouses and civil partners can combine their benefits meaning they can pass up to £ 1million tax free.

While it sounds generous, the main exemption of £ 325,000 has not increased in over a decade.

“With the inheritance tax rebates frozen for another five years, more and more families are caught in the net. It is important to take action to ensure that your family does not pay more taxes than necessary, ”said Mr. McCann.

How to make a complaint

There are two forms that taxpayers will need to make a claim: the IHT35 form to recover overpaid IHTs on stocks and other investments that subsequently lost value, and the IHT38 form for properties. Fortunately, if the stock or property has increased in value, the tax bill will not increase.

There is a 12-month window from the date of the deceased’s death to apply for an investment, while a four-year window applies for homes.

The forms should be completed by the “appropriate person”, usually the executor, who is the person legally responsible for dividing an estate. This person is called administrator if there is no will.

If the window for making a claim is closed, the executor, often a trusted family friend, child of the deceased, or a law firm, may be required to cover the overpayment himself and reimburse the costs. recipients out of their own pocket.


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