The following four sections relate to the headings for each
separate area that you intend to investigate.
It must be clear why you think you need to raise an enquiry. One
or two words will usually not be sufficient. So if your heading as
the Area for Investigation is “Agricultural Relief”, it
will not be enough merely to write “Qy relief” or
similar. You must set out your concerns in detail. So you might
write “Relief due as claimed on land, subject to sight of
tenancy agreement. But may not be due on decd’s house,
Seaview Cottage; qy decd’s involvement in agri. at his death;
cousin appears to occupy the farmhouse, so is Seaview Cottage of a
character appropriate.”
If your concerns change as the enquiry progresses then you
must update this part of the enquiry plan with your reasons.
This field should explain
how you intend to conduct the enquiry. It should
be up-dated in the course of the enquiry to reflect any changes
found to be appropriate as new facts emerge or your perception of
the situation alters.
You would set out here the method of obtaining information.
It may just be to ask the Solicitors, or it may be to ask other
HMRC Offices, or a combination of methods. You might think that the
facts suggest an early meeting with the parties would be desirable.
You would also set out here any technical arguments that you
might use in the future, depending on the information you get back,
so the strategy should try and take you beyond your first letter.
It is not the content of your letter that is your strategy.
Rather it is the thought processes that resulted in that letter
which are your strategy and which need to be recorded here.
Following on from the example above your strategy might read:
“Investigate with agents the extent of the
deceased’s farming activity, if any. If none seek to deny
relief on Seaview Cottage. Clarify on what basis relief claimed on
farmhouse. Check tenancy to clarify approp. rate of relief. Review
decd’s tax papers and the farm accounts. All properties to DV
idc.”
If the matter is being considered elsewhere in the Office,
you would record it here. For example, “Application of the
Double Taxation Conventions being considered by Tech. Group.”
You should not record the detail of your reminding or next
action. Only if you encountered serious delay during your
investigation would you record it here, and say what you intended
to do.
There must be a realistic chance of collecting a worthwhile
amount of tax, and at every stage of your investigation you must
consider whether it is still worthwhile continuing with it in terms
of tax. This decision is a judgement call based on the individual
facts, the amount involved, the likelihood of success, and the
probable time it would take.
You are not expected to calculate or estimate the precise
amount of tax where this is not known or unclear. But for those
enquiries where the amount of tax at stake is 40% of the asset or
liability value, this should be stated.
If the potential tax at stake in unknown but your judgement
is that there is a significant risk of tax loss, then you need to
give a reason. So, for example, where you have opened the enquiry
because you think the deceased might have owned assets outside the
UK, but nothing is disclosed, you would briefly explain why you
think this.
If you consider an enquiry is worthwhile because of a point
of principle, consult your manager.
Record here the outcome in terms of tax, where applicable.
Also record here when the enquiry is no longer worth pursuit,
with an explanation.
You should record a separate outcome for each area
investigated when settled. This will mean that if an enquiry has
five areas for investigation, anyone can see quickly from a glance
at the enquiry plan which are still open.
