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, 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, 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.
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.
Table: Inheritance tax paid and late accounts penalties by UK region
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
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
About Solicitors Near Me
Solicitors Near Me, is a free online directory of solicitors across all sectors and specialties. All of our solicitors are hand-selected to be the best at what they do, meaning you can be assured of a high-quality, personal service near you.