HMRC imposes 100% penalty for unpaid inheritance tax liability

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Osias Tager died in 2005 without making a Will. The total value of his estate is unknown. However, his son – Romie Tager, a barrister – has partially administered the estate and has therefore become responsible for declaring and paying the inheritance tax due. He has not done so. Despite numerous requests, HMRC sought to apply a tax-related penalty for the son’s failure to co-operate – the first time HMRC has applied for this.

Despite the son’s defence, Judge Bishopp agreed with HMRC: over £1.1m inheritance tax was at risk and the Judge imposed a penalty of that sum again on Mr Tager QC for failing to comply with an inheritance tax notice. This is in addition to the inheritance tax liability itself.

If someone dies intestate, the personal representative’s authority stems from the date of the grant of letters of administration. However, this does not alter the time limits for declaring any inheritance tax to be paid and if someone starts dealing with the administration, they can then be held liable for the tax even though they have still not obtained a grant.

Nick Palmer is a lawyer at Barker Gotelee, Solicitors in Ipswich.

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