Call over inheritance tax rebate

Thousands of Britons may have paid more inheritance tax (IHT) on residential property than they should have, according to new figures.

IHT - which is based on the value of the property at point of death - can be reclaimed if the property sells for less within four years.

With house prices falling by around 11% over the last four years, tax specialists at financial services provider NFU Mutual said that up to £90 million in tax could be reclaimable.

This equates to an average rebate of £4,260 among an estimated 21,000 estates that included residential property in the last four years. Those who inherited between June 2008 to February 2009 and June 2010 to August 2011 are the most likely to be eligible for money back.

Sean McCann, personal finance specialist at NFU Mutual, said: "Many people don't realise that they can claim back inheritance tax if the property they inherit sells for less than it was valued at during probate.

"And with house prices generally falling across over the last four years, thousands of people could still be able to claim back any such overpayment."

The estimations were made using a combination of inheritance tax breakdowns from HMRC and monthly house price data from Land Registry.

NFU Mutual estimated the fall in the value of properties liable for IHT between probate valuation and eventual sale on a month-by-month basis over the last four years and therefore how much tax may have been overpaid.