An undertaking is a formal statement from the agents acting for
the taxpayers in the sale or mortgage of a property promising that
the IHT debt will be discharged out of the net proceeds of sale or
the mortgage before any other distribution of the funds takes
place. A solicitor will not normally be willing to provide such an
undertaking unless the taxpayer has provided irrevocable
instructions.
An alternative would be to obtain an undertaking from the
taxpayer personally. However, that would not of itself guarantee
that the debt will be discharged. In that situation you might
consider providing an assurance on behalf of HMRC that the
encumbrance, e.g. the land charge (
IHTM38121), will be removed immediately
the outstanding money is received.
Once you are satisfied that IHT’s position is
protected, the case owner should be advised to keep the payment
position under close review and to inform DMB of any future
problems.
Any action taken should be recorded on the Debt Management
Case Plan (
IHTM38041), with recommendations for
further action if problems arise.
