Britains have been hit with £6 million penalties for late filing of death taxes – UK Inheritance Tax Late Penalties Revealed!
- Brits losing loved ones are being hit with £6 million a year in penalties for filing inheritance tax accounts late[1], analysis of HMRC data reveals
- Estates in the South East paid an estimated £1.3 million in penalties, narrowly beating London residents, who faced a £1.2 million bill
- Residents in Richmond, West London, were worst hit, with 27 estates facing fines of £44,000 in one year
- Solicitors Near Me urges those inheriting to seek help from a lawyer to avoid late filing penalties
British estates are paying £6 million a year in penalties for filing inheritance tax accounts late[1], reveals analysis by Solicitors Near Me.
The charges come on top of the tax itself, which raised £6 billion for the Chancellor in the most recent full-year figures[2].
Some 4,990 estates in the South East paid more than £1 billion in inheritance tax in one year, second only to London. The 858 who filed their accounts late are likely to have paid £1.4 million in penalties. In London, the 721 late estates are predicted to have paid almost £1.2 million in fines.
Inheritance tax is charged at 40% on the value of an estate above £325,000, though there is nothing to pay if assets are left to a spouse, civil partner, a charity or a community amateur sports club.
Accounts must be filed by the end of the sixth month after the person died, with a £100 penalty being applied for late accounts. An additional £100 penalty would apply if the accounts are six to 12 months late, with a monthly fee applying from then on up to a maximum of £3,200[3].
Table: Inheritance tax paid and late accounts penalties by UK region
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The parliamentary constituency of Richmond Park in West London had the most people paying inheritance tax, with the 159 estates forking out £62 million. The 27 estates filing late accounts were projected to have paid £43,757 in penalties.
Table: Parliamentary constituencies paying the most inheritance tax penalties
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Solicitors Near Me is urging executors of estates to seek help from a lawyer as quickly as possible to avoid incurring a late filing penalty.
Nicholas Jervis, CEO of Solicitors Near Me, said: “Many people feel inheritance tax is an unfair cash-grab by the government, so news that Brits are paying £6 million in penalties is rubbing salt in the wound.
“Talking to an experienced solicitor as soon as possible is the best way to make sure you’re paying not a penny more than you have to.
“A good solicitor can also help the process go more smoothly during what can be a difficult time for grieving families.”
Notes to editors
- Data from HMRC: Inheritance Tax statistics: Table 12.12was used to find estates liable for inheritance tax in the year 2019/20. An approximation of the number of accounts filed late was gained by examining the number of self-assessment tax returns filed late. In 2020/21, some 2,090,000 late filing penalties were issued for 12.2 million returns. 2.09 million / 12.2 million = 17.2% of accounts filed late. The average penalty was taken to be £3,200 / 2 = £1,600.
- HMRC: Inheritance Tax statistics: Table 12.1 – analysis of receipts
- HMRC: Inheritance Tax manual
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