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HM Revenue & Customs announces “blitz” on Foreign Assets
(26/11/2006)
HM Revenue & Customs (HMRC) has announced that, for the
remainder of 2006, it will be “paying particularly close
attention to foreign assets”, reported as forming part of a
deceased’s estate.
HMRC staff examining IHT returns will ask themselves:
1. Does the return constitute a complete return of the foreign
assets owned by the deceased, transferor or trust?
(For example, if a house abroad is included in the return would
there normally be household goods? Would there be a foreign bank
account?)
2. Has the value of these assets been included in accordance
with the correct statutory principles?
(The value for inheritance tax purposes is “the price which the
property might reasonably be expected to fetch if sold in the
open market”. A non-UK valuer, accustomed to a different tax
regime, may have valued the assets on a different
[non-statutory] basis.)
Where it is unclear if all the foreign assets have been
included, or that they have been valued correctly, HMRC will
presumably ask for further information and/or explanations.
Where it appears that the executors have been negligent HMRC
will consider whether a penalty is appropriate.
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