HMRC have updated their guidance on this topic, providing “further information on time limits for recovery of unpaid tax”.
Broadly speaking, there is a four-year time limit for recovery of unpaid inheritance tax (IHTA 1984, s. 240(2)):
“Where tax attributable to the value of any property is paid in accordance with an account duly delivered to the Board under this Part of this Act and the payment is made and accepted in full satisfaction of the tax so attributable, no proceedings shall be brought for the recovery of any additional tax so attributable after the end of the period of 4 years beginning with the later of–
(a) the date on which the payment (or in the case of tax paid by instalments the last payment) was made and accepted, and
(b) the date on which the tax or the last instalment became due;
and at the end of that period any liability for the additional tax and any Inland Revenue charge for that tax shall be extinguished.”
This is subject to various exceptions, however, including cases of carelessness (six years), cases involving offshore matters (12 years) and cases where there is a deliberate understatement of tax or where there are “arrangements” (20 years). Some of the exceptions are quite complex, and the HMRC guidance also discusses the date from which these periods run.