Corrections and adjustments

Produced by Tolley

The following Trusts and Inheritance Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Corrections and adjustments
  • What is a correction?
  • What do you do?
  • Report to HMRC
  • Report to the beneficiaries
  • Adjustments
  • Qualifying Investments
  • Land
  • Clearance

Corrections and adjustments

When administering an estate the personal representatives may need to make corrections to the initial inheritance tax account or adjustments to the initial date of death values as disclosed within the inheritance tax papers.

What is a correction?

Whilst administering the estate, the personal representatives may find assets or liabilities owned / owed by the deceased at the date of death which were unidentified when submitting the initial inheritance tax account. The originally unidentified assets or liabilities may subsequently come to light following the receipt of:

  1. bank statements showing transactions after death which show details of income being received, or

  2. paperwork that is sent to the deceased’s home address

Additional liabilities may also become apparent following the personal representatives advertising for unknown creditors to come forward and claim against the estate. This should be actioned in accordance with Trustee Act 1925, s 27. The steps are as follows:

  1. insert an advertisement in the London Gazette

  2. insert an advertisement into a newspaper circulated where the deceased owned land

  3. insert advertisements as the court directs, eg where the deceased lived or carried on business

  4. make Land Charges and Land Registry searches as a purchaser of land would do

The personal representatives must allow at least two months from the date of the appearance of the advertisement for claims to be lodged and no distribution should take place within that period. This will protect the personal

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