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HMRC internal manual

Inheritance Tax Manual

HM Revenue & Customs
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Gravity: size of underpayment

The size of the underpayment may be either absolute or relative to the case.

In absolute terms, for example, an omission or undervaluation of say £100,000 is serious because of its magnitude. This would be so whether the total value of the estate is £200,000 or £2,000,000. All other facts being equal, the abatement for gravity would be the same in each case.

In relative terms, a lesser amount, say £10,000 for example, may also be serious, if it amounted to as much as a third or a half of the amount by which the declared chargeable estate exceeds the nil rate band.

Size should, therefore, be taken into account as a constituent of the abatement since it is a useful pointer to the gravity of the offence.