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HMRC internal manual

Inheritance Tax Manual

HM Revenue & Customs
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Issuing leaflet IHT 13: draft introductory wording for opening an investigation into an undervaluation

The following wording is suggested as a basis for your covering letter when issuing aleaflet IHT13. The words may need to be amended to suit the particular circumstances ofthe case.

‘You have now agreed the date of death value for the property of £X. This represents a substantial increase over the value, £Y, returned in the account. In the light of that increase I would like to be satisfied that the value originally returned was the best possible estimate of the open market value, based upon all the information available to the personal representative(s) at the time the account was delivered. I need to be reassured that the personal representative(s) acted carefully and reasonably in carrying out his/her statutory obligations when ascertaining the open market value of the property.

If the available evidence indicates that it was not appropriate to return the value of £Y then it may be that a penalty could be sought. Simply because that might be a possibility I am enclosing copies of our IHT 13 leaflet which explains the law and our practice in this area.

In order to help me consider the matter I would be grateful if you would answer the following questions …. .’