Tax
"DIY" Probates Handing UK Taxman More IHT - Wilsons

A UK-based private client law firm has shared new data from HMRC showcasing a fall in inheritance tax relief over the past five years, attributing the drop to the rising popularity of do-it-yourself litigation.
The UK’s taxman is collecting more inheritance tax (IHT) as
people increasingly attempt to handle complex litigation
themselves, resulting in less relief being handed out, a law
firm has said.
A rising “do-it-yourself” approach to probates, the judicial
process of dealing with the estate of a deceased person, means
IHT tax reliefs claimed now account for 41 per cent of the total
IHT paid to HMRC, falling from 54 per cent in 2012/13, according
to Wilsons, the
UK-based private client law firm.
The value of IHT receipts was £4.8 billion ($6.9 billion) in
2016/17, Wilsons said, up 55 per cent from £3.1 billion in
2012/13. Meanwhile, although there was an increase in the value
of IHT reliefs paid out on estates, it trailed far behind, rising
just 18 per cent to £2 billion.
“Executors who ‘DIY’ probate often think they are saving on legal
costs, but, in fact, many end up being taxed more,” Alison
Morris, partner at Wilsons, said. “Now that it is possible to
apply for probate online, more individuals are applying without
fully understanding the complex procedures around executing
wills. As a result, the layman could find that they miss out on
IHT reliefs, if they do not consult a solicitor.”
Proportion of estates eligible for IHT reliefs who claimed
them dropped to 41 per cent last year. Source:
Wilsons
In addition, non-professional executors could risk legal action
being taken against them if beneficiaries lost out on IHT
reliefs, Morris explained.
“If non-professional executors make mistakes when applying for
probate, they could overlook some or all of the IHT reliefs
available, increasing the likelihood of disputes over wills in
court,” Wilsons said in a statement accompanying the data.