Inheritance tax: Seven easy ways to slash HMRC bill AFTER the passing of a loved one

While it’s well documented how to reduce how much inheritance tax Britons have to pay before a loved one dies, people often overlook what can be done after they have passed. It’s entirely possible to make huge savings if taxpayers follow the right advice.

Britons can ask for a five percent reduction if the property has tenants in situ.

If the property is occupied by short term tenants for one year or less, HMRC usually accepts a discount of five percent on the full value of the property.

If the tenant has signed a commercial lease or has a longer fixed term tenancy, the deductions can be greater than 5 percent.

However, many people miss out on this easy win tax saving.

Other factors which can affect how much IHT family members pay include if the property was co-owned at the time of passing.

Mr Green continued: “Section 18 of the IHT Manual permits a further 15 percent deduction of the deceased’s share of the property, if at the valuation date, any co-owner remained in occupation of the property as their main residence.

“If the co-owner(s) did not occupy the property as their main residence, the discount can still be up to 10 percent.”

If the property is co-owned by a company, a discount on the deceased’s share of up to 20 percent can be applied depending on whether the deceased owned minority shares or majority shares.

Seven questions people need to ask themselves are:

1) What date was the property valued at?
The value of the property at the date of death may be much lower than the current market value or any Estate Agents appraisal.

2) Is the Property tenanted?
Many estates miss out on this easy win concession.

3) Are there any major defects to the Property or missing safety certificates?
If at that date of death, the property was suffering from defects such as subsidence or severe damp, even if these faults have now been fixed, these matters should be considered when assessing the value.

4) Was the property co-owned at the date of passing?
The discount can be up to 10 percent.

5) Is the Property owned by a company?
Again, a discount on the deceased’s share should be applied, up to a maximum of 20 percent.

6) Are there any unneighbourly issues affecting the property?
A neighbour’s planning application can have an adverse effect on the value of the
property.

7) Is the property in a block of flats?
This could cause additional expenses if work is in the pipeline.

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