Brits ‘overpay’ inheritance tax bills29th May 2012
Large numbers of UK taxpayers may have paid more inheritance tax than they needed to, according to new data.
In statistics released by NFU Mutual, figures showed that inheritance tax (IHT) on residential properties is being routinely overpaid because people are not aware of the specifics of what they have to pay.
IHT is based on the value of a property when the owner passes away, and is charged to the inheritor. However, what many people do not know is that if the house sells for less than its market value within four years of the owners death, the inheritor can claim back the excess tax.
According to NFU inheritance experts, the recent collapse in UK property prices has left up to £90m sitting in Government accounts that could be reclaimed by the payer.
Commenting on the research, NFU Mutual personal finance specialist Sean McCann said: “Many people don’t realise that they can claim back inheritance tax if the property they inherit sells for less than it was valued at probate.
“And with house prices generally falling [across the board] over the last four years, thousands of people could still be able to claim back any such overpayment.”