IHTM38111 - Dealing with the taxpayer in Debt Management & Banking (DMB): pursuing payment from other liable persons

When there has been a significant delay in contacting a beneficiary or some other person liable by reason of IHTA84/S200 (1)(c) & (d) it is important to minimise the alarm and concern that an unexpected demand from HMRC may cause.

The initial approach to a beneficiary or some other person in whom property vests should not be a demand for payment.

Instead, as the DMB caseworker, you should explain why it has become necessary for HMRC to contact them, how the debt has arisen and what we have done to see that it is discharged (see "Taxpayer confidentiality" ( IHTM38109).

You should explain how their liability for the debt has arisen under the legislation and offer to meet with them to discuss the settlement of the debt from the resources available.

If because of delay or some other reason you think that an approach to the beneficiary may cause distress, anxiety or complaint the "next steps" should be agreed with the DMB Team Leader.

In the absence of some specific assurance concerning the settlement of a debt we have a responsibility to ensure that each taxpayer pays the correct amount of tax and interest due.

As a rule you should not consider remitting all or part of any tax or interest due unless it can be shown to be "irrecoverable" (This text has been withheld because of exemptions in the Freedom of Information Act 2000)( IHTM38491).

An example of a possible exception to this "rule" would be when we have known for some time that the personal representatives ( IHTM05012) or trustees have been unable or unwilling to discharge the debt and we have delayed taking recovery action or making contact with the other persons liable. In this situation we may consider remitting the interest that accrued on the tax not paid during the period of our delay.

Similarly you may consider the full and final settlement of a beneficiary’s liability by way of contract settlement ( IHTM38341) if it can be shown that "hardship" would otherwise result. This could result in full or partial remission ( IHTM38491) of all the tax and interest due.