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HMRC internal manual

Inheritance Tax Manual

From
HM Revenue & Customs
Updated
, see all updates

Penalty request letter: standard letter

 

  : penalty for a late account
   

Thank you for the completed inheritance tax account. The information you have provided will be reviewed and you will hear from us in due course.

This account was sent to us outside the usual 12 month time limit allowed by s.216 Inheritance Tax Act 1984. A penalty of £ therefore arises under s.245.

A penalty may not be payable if there is a reasonable excuse for the delay. We consider a reasonable excuse as one where an event beyond your control prevented you from sending the account to us before the time limit expired.

Please either

  • send your payment with the attached payment slip to the address shown thereon, or
  • if you consider that there is a reasonable excuse for the delay, please provide details on the attached sheet and send it to the address at the head of this letter.

PAYMENT SLIP

  Reference…………………….
   
To: Section K, HMRC IHT, Ferrers House, PO Box 38, Castle Meadow Road, NG2 1BB or DX 701205 Nottingham 4  
S.245 penalty of £………………..enclosed  

REASONABLE EXCUSE

  Reference…………………….
   

To: HMRC IHT, Ferrers House, PO Box 38, Castle Meadow Road, Nottingham, NG2 1BB or DX701201 Nottingham 4

  1. Please indicate the reason for the delay (as appropriate)
    The account was lost or delayed in the post
     
    Loss of the deceased’s financial records or other papers
    Serious illness
    Bereavement
    Other (please specify)
  1. Please give details below in support of 1 above
 
 

Signed……………………………………………………………(taxpayer/agent)

Extract from IHT13 leaflet, “Inheritance tax and penalties”

Examples of what we may agree as a reasonable excuse

The account was lost or delayed in the post

We expect you to allow sufficient time for the account to reach us by the due date. However, where the return is posted in good time, we agree as a reasonable excuse any unforeseen event which disrupted the normal postal service and led to the loss or delay of the account, such as

  • fire or flood at the Post Office where the account was handled, or
  • prolonged industrial action within the Post Office.

Loss of the deceased’s financial records or other relevant papers

We normally agree that the loss of records through fire, flood or theft is a reasonable excuse, although we may need evidence of the circumstances. We also need to be satisfied that the information necessary to complete the account could not be replaced in time for the deadline.

Serious illness

The illness must be so serious that it prevented you from dealing with Inheritance tax affairs before the deadline and from that date to the time the completed account is sent in, such as

  • Coma
  • Major heart attack
  • Stroke
  • Any serious mental or life-threatening illness.

Where illness involves a lengthy stay in hospital or convalescence, we normally expect you to have made arrangements for completing and sending in the account on time. There may be cases where this is not possible.

If the excuse involves the serious illness of a close relative or partner, we agree this only if

  • The situation took up a great deal of your time and attention during the period from the deadline to the date the completed account was sent in, and
  • You had already taken steps to have the account ready on time.

Bereavement

Naturally, we agree the death of a close relative or partner shortly before the deadline is a reasonable excuse, as long as you had already taken the necessary steps to have the account ready on time.