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HMRC internal manual

Inheritance Tax Manual

Published guidelines: Calculation of additional tax and form IOV2

IHTA84/S218A, inserted into the IHTA by the FA2002/S120(2), places an obligation on the relevant persons to submit the variation to us within 6 months of execution if it results in additional tax.

IHTA84/S218A (1) obliges them to notify us of the amount of the additional tax.  Whilst this is a statutory duty, if the taxpayers fail to send the calculation with an otherwise satisfactory instrument of variation(IoV), you should continue with the calculation yourself but point out to the taxpayers their obligation to do this themselves in any future cases.

We have also provided taxpayers with a checklist, form IOV2, to help them get their IoV right.  If they choose to complete the form, we have asked them to send it to us with the IoV.  This form is broadly similar to our internal form IOV1 (IHTM35031) and should help you deal with the IoV more quickly.  But we cannot oblige them to submit this form.  You should not reject an otherwise satisfactory IoV simply because the IOV2 has not been submitted.  In these cases you should complete form IOV1 yourself instead.

Where an IOV2 is received you should check its accuracy and take account of any No answers for questions 1 to 4 and Yes answers for the remainder.  If an IOV2 has been completed you do not need to complete a form IOV1.