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HMRC

Also known as: HM Revenue & Customs, Tax Authority

Definition

HMRC (His Majesty's Revenue and Customs) is the UK government department that collects taxes, including inheritance tax, and provides clearance needed for executors to obtain probate.

Understanding HMRC's role is essential for anyone handling an estate, as most estates over £325,000 require HMRC reporting before probate can be granted.

What Does HMRC Mean?

HMRC (His Majesty's Revenue and Customs) is the UK's tax authority, established in 2005 under the Commissioners for Revenue and Customs Act. As a non-ministerial government department, HMRC collects and administers all major UK taxes, including inheritance tax. This makes them the organisation executors must work with when administering estates.

Whether executors must contact HMRC depends on the estate's classification. "Excepted estates"—generally those worth under £325,000 (or £650,000 with transferred nil-rate band) meeting specific conditions—can apply for probate directly without HMRC reporting. However, most estates above these thresholds require HMRC interaction. James is executor for his aunt's £450,000 estate. He must complete the IHT400 form, submit it to HMRC, and wait for their acknowledgement letter containing a unique code. After receiving this code (typically 20 working days), he can apply for probate. The inheritance tax of approximately £50,000 must be paid within six months of death, though he can arrange payment directly from estate bank accounts using the Direct Payment Scheme.

The probate process changed significantly in January 2024. Executors must now submit the IHT400 to HMRC first, wait for acknowledgement with a unique code, then use that code to complete the probate application online. This integration makes HMRC a required step in the probate workflow itself.

HMRC's involvement continues after probate is granted. Executors may need to submit tax returns covering estate income, capital gains, and final estate accounts. HMRC retains investigation powers for up to 20 years after inheritance tax is paid. However, HMRC provides support through their Inheritance Tax helpline (0300 123 1072, Monday to Friday, 8am to 6pm), where executors can get free guidance on completing forms and calculating tax.

Common Questions

"Do I need to contact HMRC when someone dies?" You need to contact HMRC if the estate doesn't qualify as an "excepted estate"—generally estates over £325,000 or with circumstances like lifetime gifts exceeding £250,000. For excepted estates, you report values directly when applying for probate. Check GOV.UK guidance or call the HMRC helpline if unsure.

"How long does HMRC take to respond when applying for probate?" After submitting the IHT400 form, you must wait a minimum of 20 working days before applying for probate. HMRC sends an acknowledgement letter with a unique code and the estate values you reported. Processing times can be longer during busy periods.

"Can HMRC help me calculate inheritance tax if I don't have a solicitor?" Yes, HMRC provides free support for executors without professional help. Call the Inheritance Tax helpline (0300 123 1072) for guidance on completing forms and calculating tax. HMRC can work out the tax amount if you provide accurate information. They also publish detailed guides on GOV.UK.

Common Misconceptions

Myth: I don't need to worry about HMRC because inheritance tax was already paid during the person's lifetime

Reality: Inheritance tax cannot be prepaid—it can only be calculated and paid after death. While income tax may have been paid during someone's lifetime, inheritance tax is a tax on the estate at death. Executors must report the estate to HMRC (unless it's an excepted estate) and calculate tax based on the estate's value at death, including gifts made within seven years.

Myth: HMRC will tell me if I've made mistakes on the inheritance tax forms

Reality: HMRC relies on executors to provide accurate information. It's the executor's legal responsibility to ensure all assets are correctly valued and reported. HMRC can investigate estates up to 20 years after tax is paid. If they discover undervaluation or unreported assets, executors may face penalties and interest. The acknowledgement letter confirms receipt—it doesn't constitute a full audit or guarantee accuracy.

Understanding HMRC connects to these related concepts:

  • Inheritance Tax: HMRC is the government department that administers and collects inheritance tax on estates above the nil-rate band.
  • IHT400: The main inheritance tax account form that executors submit to HMRC when an estate doesn't qualify as excepted.
  • Probate: HMRC clearance is a prerequisite for obtaining probate in most estates since the January 2024 process changes.
  • Estate Administration: HMRC's involvement extends throughout estate administration, including tax returns for estate income and capital gains.
  • Tax Return: Executors may need to file tax returns with HMRC both for the deceased and for the estate during administration.
  • Understanding Inheritance Tax in the UK (2025): Comprehensive coverage of the inheritance tax that HMRC administers and collects.
  • How to Reduce Inheritance Tax Legally in the UK: Learn legitimate tax planning strategies that HMRC reviews and verifies.
  • What is Probate? A Step-by-Step Guide for Executors: Understand how HMRC reporting fits into the probate process after January 2024 changes.
  • How to Apply for Probate in the UK: Practical guidance on when to contact HMRC and how to use their unique code.
  • What Happens When Probate is Granted?: Discover HMRC's ongoing role during estate administration.

Need Help with Your Will?

Understanding HMRC's role in estate administration highlights the importance of proper will planning. A well-structured will can help your executors navigate the HMRC reporting process more smoothly.

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Legal Disclaimer: This glossary entry provides general information about UK legal terminology and does not constitute legal advice. For advice specific to your situation, consult a qualified solicitor. HMRC guidance, forms, and procedures change regularly. Always check GOV.UK for the most current information before taking action.