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HMRC internal manual

Inheritance Tax Manual

Innocent error: not aware of omitted asset or gift

Taxpayer cannot be expected to include assets which they are not aware about or which they could not reasonably find out about at the time an account was delivered.

If the taxpayers claim that they were not aware of an omitted gift or asset then you will need to find out precisely

  • how the existence of the gift or asset came to light, and
  • why its existence was not known at the time the account was delivered.

You should ask for documentary evidence to show the sequence of events.

You should not accept this explanation if

  • enquiries to third parties such as banks, accountants, relatives, valuers were not made until after the account was delivered
  • the enquiries to third parties were made but the account was delivered before the replies were received
  • the deceased’s papers were not searched for and if found examined until after the account was delivered
  • any information obtained was not personally checked with the details shown in the account before it was signed and delivered.

If you are satisfied that the taxpayer did not know about the gift or asset, and it could not have been brought to light through any reasonable actions taken by the taxpayer prior to the delivery of the account, then you can accept that the omission was innocent.