IHTM09223 - Exchange of information with tax offices (form 982 procedures): how to use information from tax offices

If you have to challenge any discrepancy with the taxpayers you should be careful not to give any impression that you are accusing the taxpayers of any wrongdoing. There may well be an explanation as to why the information given to the tax office and that on your file do not match up. The following gives guidance on how to deal with those items identified by the tax office on form 982 as requiring further investigation.

Decreases in capital

You should say that internal enquiries have revealed that income has fallen and quote the tax years concerned. Ask the taxpayers

• why the deceased’s income has fallen, and
• whether any income producing assets have been disposed of, and, if so can they say what was disposed of, who they were disposed of to, when did the disposal take place and where are any proceeds reflected in the estate.

Try to identify specific capital assets that do not appear on the IHT400. You refer the taxpayers to these items saying that that were returned for income tax purposes in the relevant tax year. Ask the taxpayers to say whether the asset has been disposed of and, if so, for information about how the item was disposed of and what happened to the proceeds.

No grant or confirmation taken out

Check ALF ( IHTM03311) and the Calendar of Grants ( IHTM09310) and if there is no trace ask the taxpayers whether and when they intend to take out a grant or confirmation. If the taxpayers indicate that there are obstacles to taking out the grant then you may need to refer to DMB to protect HMRC's interests.

Enduring Power of Attorney

You will only be interested in the existence of a power of attorney if it has been used to dispose of the deceased’s assets. You will therefore need to establish some basic facts by asking if the power was

• used to manage the deceased’s affairs
• used to dispose of or make gifts of the deceased’s property, and
• registered with the Court of protection.

If the power was not used, or there were no disposals or gifts, there is nothing else to pursue. If there were disposals or gifts you should ask for details of any that have not been included in the account.