HMRC opened investigations into almost one in four of the 22,000 estates on which IHT was due in the 2018-2019 tax year, according to a freedom of information request submitted by wealth advisors Quilter. Some 5,537 IHT returns were investigated in the tax year. The number of investigations has grown by 7.8% following the introduction of the (far from simple) Residence Nil Rate Band.
Gordon Andrews, tax and financial planning expert at Quilter, said that "Over the past number of years politicians have been keen to show they are cracking down on tax-dodgers and IHT is one of the departments that HMRC has been throwing its resources at". He added "More often than not, people aren't deliberately trying to defraud HMRC and given the current complexity of the IHT system it's really no surprise if things go awry ... this is absurd at best and perverse at worst as it is essentially penalising people for appropriate tax planning." This shows how important it is to seek advice from a specialist who will know what HMRC are likely to see as triggers and how to pre-empt questions as far as possible to avoid, or mitigate, the costs involved in any investigation.

Source: Mondaq

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