The liability of the transferor's personal representatives (
IHTM05012) is a sensitive area of the
legislation. You must alert the personal representatives at an
early stage where recourse to them
might occur. In cases where the transferee (
IHTM30051) is not resident in this
country we are likely to be aware of that fact from the replies on
the schedule IHT403, but nevertheless we should still warn the
personal representatives of their potential liability, failing
payment by the transferee and any other persons who may be liable
under IHTA84/S199 (1).
Similarly SAV should be alert to any valuation in which it
is evident that the value of the property transferred is far less
than the value transferred and where tax will be payable on the
gift. SAV should give a warning to this effect as soon as possible
to whoever issued the valuation request and it will then be their
responsibility to decide what further action to take.
You must remember that the facility to have recourse to the
transferor's personal representatives is not to be regarded as a
soft option. We are to make all the attempts at recovering from the
persons liable under IHTA84/S199(1) that we would presently
contemplate in a similar situation against any liable person. But
having warned the personal representatives that we may look to them
to discharge the tax liability, we must ensure firstly that they
are kept fully in the picture and secondly that a decision actually
to collect from them is not delayed for years.
The Law Societies of England and Scotland have expressed
concern about the liability of personal representatives under
IHTA84/S199 (2). In response HMRC have indicated that we "will not
actually pursue for inheritance tax personal representatives
who
have obtained a certificate of discharge and distributed the
estate before a chargeable lifetime transfer comes to light.
This statement of the Board's position is made without
prejudice to the application in an appropriate case of IHTA84/S199
(2) Inheritance Tax Act 1984."
The quotation is from letters sent to the two Law Societies
on 6 February 1991. It was published in the Law Society's Gazette
dated 13 March 1991, page 17.
Note that tax collected from personal representatives of the
transferor under IHTA84/S199 (2) was never a liability of the
transferor. Accordingly IHTA84/S5 (4) cannot apply and
