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HMRC internal manual

Shares and Assets Valuation Manual

Inheritance Tax: Penalties

You need to liaise with the IHT caseworker in connection with the imposition of penalties under Schedule 24 Finance Act 2007 (Schedule 40 Finance Act 2008 contained provisions to extend this regime to IHT from 1 April 2009), especially if you uncover taxable property such as a gift or a loan account which was not disclosed by the liable persons but also (on occasions) if you have negotiated a value very much in excess of that originally returned.

The Compliance Group will not raise a penalty in the case of an under-valuation of an asset considered by SAV which has led to an understatement of the person’s tax liability without reference to the valuer. The role of the SAV valuer will be to advise the Compliance Group caseworker whether, under the new penalties regime, the person may be considered to have exercised reasonable care to get their tax affairs correct, in relation to the completion of their return or any other document(s).

Any such request for advice from the Compliance Group should be handled at Higher Officer level or above. Valuers need to bear in mind the scope for genuine (and, sometimes, wide) differences of opinion on valuation matters. Before any decision is made on the charging of penalties, the case must first be referred to the Appeals Team (see Chapter 117 of this manual SVM117000).

  Additional Guidance: SVM150000