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HMRC internal manual

Inheritance Tax Manual

HM Revenue & Customs
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Instruments of Variation: time limits

The statutory periods in the IoV legislation are that

  • the instrument must be made within two years (IHTM35024) of the date of death, and
  • where the instrument is executed before 1 August 2002 a written notice of election (IHTM35027) must be given to the Board within six months of its execution
  • where the instrument is executed on or after 1 August 2002 the instrument must be sent to us within six months of its execution if it contains a statement of intent (IHTM35028) that IHTA84/S142 (1) applies to it and it results in additional tax being payable.

The limits make IoVs a prime area for complaint about delay. Consequently you must give such cases priority, particularly where the time limits are approaching.

Unless the taxpayer has allowed so much of the statutory period(s) to expire before submitting the documents to us that it is impracticable to consider the papers within the time limits, your response must be made in sufficient time to enable them to review their position before the appropriate period expires. In particular

  • where it is known that an IoV is to be, or has been, executed you should request a copy as soon as possible, and remind the taxpayer of the need for a timely election,
  • on receipt of the instrument, or copy, you should examine it as a matter of some priority (increasingly so as the two year period runs out). And if it is an instrument executed before 1 August 2002 and is not accompanied by a valid election you should point this out to the taxpayer immediately, with a request that if the terms of IHTA84/S142 (1) are to apply then such an election must be made within the statutory period.
  • where the instrument is executed on or after 1 August 2002, it must incorporate the statement of intent so the taxpayer will not have the option to submit a separate statement. If it does not include a statement of intent but the taxpayers nonetheless indicate that they believe IHTA84/S142 (1) to apply, you should refer the case to Technical Group.