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HMRC internal manual

Inheritance Tax Manual

Reduced account: penalties for incorrect delivery of a reduced account

If all the conditions (IHTM10472) for delivering a reduced account are not met then the taxpayers may have delivered an ‘incorrect account’ (IHTM36101) and you will need to consider whether a penalty may be payable under IHTA84/S247.

Delivering a reduced account in the belief that spouse/civil partner (IHTM11032) or charity exemption was due when it was not, would not in itself make the account incorrect. But if the information provided in the account is incorrect then a penalty may be due if additional tax becomes payable and you can demonstrate that the error was the result of either fraud or negligence. An example of incorrect information is where the deceased is described as married or in a civil partnership when the deceased was not married, or in a registered civil partnership.