Welcome to DLS Solicitors’ comprehensive guide on disputing the value of assets for Inheritance Tax purposes. Inheritance Tax planning and estate administration can be complex, particularly when it comes to valuing assets. It is not uncommon for disagreements to arise over the valuation of assets within an estate, which can have significant implications for IHT liability. This guide aims to provide clarity and guidance for those wishing to challenge the valuation of assets for IHT purposes.
Understanding Inheritance Tax and Asset Valuation
Inheritance Tax is a tax on the estate (the property, money, and possessions) of someone who has passed away. The standard threshold in the UK is £325,000, and only the value of the estate above this amount is subject to tax at 40%. Valuing the estate correctly is crucial to determining the correct amount of IHT due.
When to Dispute Asset Valuations
Disputes over asset valuations for IHT purposes can arise for several reasons, including, but not limited to:
- Incorrect valuation methods being applied
- Market value fluctuations
- Disagreement on the condition or rarity of specific items
- Property being undervalued or overvalued
It’s important to address any discrepancies as soon as they are identified to ensure the estate is not unfairly taxed.
How to Dispute the Value of Assets
Disputing the value of assets for IHT purposes involves a structured approach:
Step 1: Obtain a Professional Valuation
First, secure a professional valuation from a qualified expert. This could be a chartered surveyor for property, an antiques expert for personal possessions, or a financial advisor for stocks and shares. The valuation should be current and take into account any relevant factors that could affect the value.
Step 2: Submit Evidence to HM Revenue and Customs (HMRC)
Once you have a professional valuation, submit this evidence to HMRC along with a detailed explanation of why you believe the original valuation was incorrect. It’s vital to provide as much detail and supporting documentation as possible to substantiate your claim.
Step 3: Negotiation and Resolution
HMRC may accept your revised valuation, propose a different valuation, or request further evidence. This can lead to negotiations, which may require additional expert opinions or valuations. Having legal support during this process can be beneficial to navigate the complexities of tax law and negotiation.
Legal Considerations
Disputing asset valuations for IHT purposes may require legal advice, particularly if the dispute cannot be resolved through negotiation with HMRC. Legal professionals can provide guidance on the strength of your case, represent you in discussions with HMRC, and advise on any potential legal action.
Conclusion
Disputing the value of assets for IHT purposes can be a necessary step in ensuring that an estate is not overburdened with tax liabilities. With careful consideration and professional advice, it is possible to challenge incorrect valuations and achieve a fair outcome. At DLS Solicitors, we are committed to providing expert legal guidance through every step of the process, ensuring that you are fully supported in matters of Inheritance Tax and estate administration.
Contact Us
If you require assistance with disputing asset valuations for Inheritance Tax purposes, or have any further questions, please do not hesitate to contact us at DLS Solicitors. Our team of experienced solicitors is here to offer professional advice and support tailored to your specific needs.
