Inheritance Tax Refunds on the Rise

With the stock market crash in February and March this year, the number of people claiming refunds on Inheritance Tax due to falling share prices has more than doubled in the last two years.

Inheritance Tax is calculated on the value of an estate at the time of death. However, refunds can be claimed back if the value of an asset from the estate is lower when it is sold than its original valuation. Provided the stocks or funds are sold within 12 months of the death and they are sold by the Executor, the Inheritance Tax on the difference between the two amounts can be claimed back.

Refunds can also be claimed on house sales up to 4 years after the death, where the sale price is below the valuation at time of death. If the Coronavirus crisis has the predicted effect on house prices, more beneficiaries will benefit from these refunds. It is important to remember that the sale of any estate asset must be made by the Executor in order to qualify, not the person(s) the assets have been passed onto.

It is reported that 1,851 refund claims were made in 2019-20, compared to 858 in the previous financial year.

If you would like any advice on Inheritance Tax, Folkes Worton are here to help. Call us on 01384 376964.

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