My client has recently looked at an estate return for his father who died over 20 years ago, and he noticed that one of his father’s UK assets was missing from the return and inheritance tax should have been paid at the time, but no tax has been paid. Does my client still have to report this or is the tax out of date for HMRC to collect? If tax and interest are payable, will there be any penalties chargeable?

Inheritance tax has some unique rules regarding remedying defective returns. Under Inheritance Tax Act 1984 (IHTA 1984) s217 the error must be fully reported to HMRC within six months of it being discovered by the taxpayer, irrespective of when the original return was due.