You should consider negotiating a settlement where the issues
are not clear cut and the taxpayers cannot be persuaded that your
point of view is the correct one. Negotiation can be by means of
letter but more often it is best done at a meeting (
IHTM09062) or over the telephone.
Examples of the sort of situations where you might enter into
negotiations to break a deadlock can be found on the next page (
IHTM09072). These are mainly situations
where there are factual uncertainties or where valuation issues
where views are can be subjective. You must not negotiate matters
of law. If the validity of a claim for tax or its extent is
disputed on a point of law, a lower figure than the full amount of
tax involved may only be accepted by way of compromise with the
authority of Litigation.
You should only seek to enter into negotiations once you have
all the information that can reasonably be obtained. If agreement
cannot be reached then you are entitled to take a view based on the
information that is available. You do not have to establish matters
beyond reasonable doubt. For example, if there are unexplained
withdrawals from the deceased’s bank account you do not have
to establish where the money went to treat the withdrawals as
gifts. There may be evidence such as the payment of similar sums to
other relatives, which suggest that they are likely to be gifts. It
is in these sorts of areas that you need to make judgements and
negotiate agreements.
There are separate instructions for negotiating penalties (
IHTM36221).
