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Page last updated at 12:16 GMT, Saturday, 3 May 2008 13:16 UK

HMRC reassures families over IHT

By Bob Howard
BBC Radio 4's Money Box

Ian Miles, an IHT specialist at accountants Grant Thornton
Ian Miles says a significant number of families could face problems

The Revenue says it will offer a "lighter touch" when assessing estates that may benefit due to the recent changes to inheritance tax (IHT).

Since last October surviving spouses can use any remaining IHT allowance unused by a spouse who has died.

That could mean an IHT threshold of 624,000 rather than 312,000.

But some experts think it may be difficult for families to find the proof needed for those who died many years ago.

What documents?

To get the higher allowance, a widow or widower has to prove they inherited all or the bulk of the estate of their late husband or wife.

Revenue and Customs' guidelines say it will need to see the death certificate, marriage certificate, will, the grant of representation or confirmation in Scotland and any deed of variation.

I feel totally confused by the whole situation.
Pearl Fox, Money Box listener from Derbyshire

Pearl Fox lives in Derbyshire and her husband died 16 years ago.

She told Radio 4's Money Box programme she is not at all sure, after 16 years, if she can find any of these documents:

"The papers that I would be supposed to present are fairly obviously long-gone.

"I feel totally confused by the whole situation."

Some inheritance tax experts share Pearl's concerns.

Ian Miles, an IHT specialist at accountants Grant Thornton, says the families of a significant number of spouses could potentially face problems:

"I can think of cases where you might keep the records perhaps for six years and then after that you might destroy them.

"We could be going back to the 1970s or even before that."

A solution?

Alastair Collett, specializes in inheritance tax at law firm Bircham Dyson Bell
Most of the documentation that they want... is public documentation
Alastair Collett, of Bircham Dyson Bell

Some missing documents can be replaced.

Copies of wills and grants of representation or confirmation in Scotland, are available from the Courts Service and death and marriage certificates can be obtained from the respective General Register Offices.

Alastair Collett, who specializes in inheritance tax at law firm Bircham Dyson Bell, believes although some families may still face problems, many should be able to piece together the financial details required by the Revenue:

"Most of the documentation that they want, if it is not available either in the family's own records or perhaps from the family's own solicitors or accountants at the time, much of it is public documentation."

The Revenue says 2,500 people have already successfully applied to use a deceased husband or wife's allowance since the change in October.

HMRC spokesperson Claire Merrills says if families can provide the basic paperwork, that should be sufficient:

"If we can get copies of things like the death certificate and marriage certificate, it's a lighter touch we're going to be taking in these circumstances.

We've had no problems to date."

BBC Radio 4's Money Box was broadcast on Saturday,
3 May 2008 at 1204 BST.

Money Box



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