Probate – The Risks for Personal Representatives and Executors

Liability of personal representatives for inheritance tax

  • Section 4, Inheritance Tax Act 1984 (“IHTA”) provides that inheritance tax is charged on the death of an individual as if, immediately before the death, the individual had made a transfer of value equal to the value of his estate immediately before his death.
  • Section 200, IHTA provides that, with limited exceptions the deceased’s personal representatives are liable for the inheritance tax arising on the deemed transfer on death.
  • Section 216, IHTA requires the personal representatives to deliver an inheritance tax return and pay any inheritance tax due before the court issues the grant of representation to them.  However, where the estate includes land, the inheritance tax arising in respect of that land can be paid in ten equal annual instalments (s227 IHTA) – save that if the land is sold, any unpaid instalments (together with accrued interest) then become immediately payable.

Harris v HMRC [2018] UKFTT 204 (TC)

1.              Mr Harris was appointed as personal representative of the late Helena McDonald by letters of administration  issued in the High Court on 12 June 2013.

2.              On 28 April 2013, Mr Harris filed IHT400 – an inheritance tax account – with HMRC.  On 16 April 2014, HMRC opened an enquiry into the account and on 7 October 2015 issued an inheritance tax determination on the basis that the value transferred on Helena McDonald’s death was £1,178,196.92 and that the inheritance tax payable was £341,278.76.

HMRC pursued payment of £341,278, Mr Harris said he didn’t have the money because he had distributed the estate mainly to the deceased brother, Mr Harris believed the the beneficiary would pay the tax.

The beneficiary then moved to Barbados and would not respond to Mr Harris.

Mr Harris was unsuccessful in his defence if ignorance of obligations or inability to pay.

He was found personally liable.


HMRC can be slow in dealing with IHT400 returns and pressure can be significant from beneficiaries requesting distributions. There is a facility (in IHTA 1984, s239(2) to apply to HMRC for a ‘clearance certificate’ (form IHT30) if the personal representatives  believe that all assets and liabilities have been reported to HMRC. If HMRC gives clearance, it normally discharges taxpayers from further liability.


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