Tax advice of the week: Are you due a tax refund?
Jun 08, 2012
If you have received an inheritance bill over the past few years that included a residential property, the chances are that you may be due a tax refund, says Mark Bridge in The Times.
Inheritance tax (IHT) is normally payable at 40% on estates over £325,000. However, the probate valuation of a property used by the taxman after death may well have been excessive, given that house prices have fallen around 11% since May 2008.
If the property sells for less than the probate value within four years, tax can be reclaimed. According to insurer NFU Mutual up to £90m is currently reclaimable, which “implies an average rebate of £4,260 among the estimated 21,000 estates that included residential property in the past four years”.
The good news doesn’t stop there. As Sean McCann of NFU Mutual points out, overpayments also apply “to qualifying investments, including shares and unit trusts sold at a lower value within 12 months of death, although detailed rules apply”. If you have paid IHT on property or shares and think you may be due a refund, seek professional advice.