IHTM36103 - Incorrect account, information or document: s.247 (1) penalty

The information on this page applies to deaths before 1 April 2009. If you are considering a penalty for a death on or after 1 April 2009 you will need to refer to the guidance in the Compliance Handbook beginning at CH80000.

A penalty may be payable under IHTA84/S247 (1) if the person who is liable for tax (IHTM30011) fraudulently (IHTM36291) or negligently (IHTM36301)

• delivers an incorrect account
• furnishes incorrect information, or
• produces incorrect documents

to the Board.

The maximum penalty payable for accounts, documents or information delivered after 22 July 2004 is 100% of the tax potentially lost.

The tax potentially lost is the difference between

• the amount of tax that is correctly payable, and
• the amount of tax that would be payable on the basis of the incorrect account, information or document, IHTA84/S247 (2).

The amount of tax potentially lost is considered to be only that for which the person is liable in the capacity in which they signed and delivered an account. For example, personal representatives will only be liable to a penalty based upon the potential tax loss attributable to the free estate and not for any potential tax loss on other aggregable property for which they are not liable such as a trust in which the deceased had a life interest.

For accounts, documents or information delivered between 22 July 1999 and 22 July 2004 the maximum penalty is

• in the case of negligence, £1,500 plus the potential tax lost as a result of the incorrect account, information or document, or
• in the case of fraud, £3,000 plus the potential tax lost as a result of the incorrect account, information or document.

A lower penalty applied to incorrect accounts, information or documents that were delivered, furnished or produced before 27 July 1999.