Grieving families could face requests for financial records years after a relative’s death under proposed changes to HMRC’s information-gathering powers. The plans would give HMRC the ability to seek information beyond the existing four-year period, subject to approval from a tax tribunal.
HMRC Could Seek Records Beyond Four Years
The proposed changes concern Schedule 36 notices, which HMRC uses to request documents and information when checking whether the correct amount of tax has been paid.
Under the proposals, HMRC would need permission from a tax tribunal before making an information request more than four years after a person’s death. There would be no ultimate time limit on such requests, according to reports.
The change does not mean HMRC would automatically be able to recover unpaid tax indefinitely. Separate statutory deadlines apply to tax assessments.
Executors Could Face Requests Years After an Estate Is Settled
An executor is responsible for dealing with a deceased person’s estate, including property, money, debts and tax affairs. If the proposals become law, an executor could potentially be asked to produce historical records long after the estate had been dealt with.
The tribunal would decide whether HMRC could issue an information demand beyond the four-year period. Reports indicate that executors and relatives would not necessarily have to be notified before the tribunal considers HMRC’s request.
That has raised concerns about the administrative burden placed on families dealing with an old estate.
Why HMRC Wants the Change
An HMRC source told The Telegraph that the proposed change is linked to international tax cooperation. Some overseas tax authorities have longer periods in which they can assess tax. The proposed powers would help HMRC obtain information when dealing with cases involving international tax matters.
The changes also reflect the growing use of digital tax records and are intended to bring existing information-gathering powers closer to international standards.
Critics Warn of Prolonged Uncertainty for Families
The proposals have attracted criticism from Richard Fuller, the Conservative shadow chief secretary to the Treasury. Fuller argued that investigations conducted years after someone’s death could leave families dealing with financial questions long after an estate had been settled.
The concern is particularly relevant to executors, who may no longer have easy access to documents relating to a deceased person’s finances. HMRC has not indicated that every estate would be subject to such requests.
The proposed power would require tribunal approval for information demands made beyond the four-year period.
Separate HMRC Powers Are Also Expanding
The proposals come amid wider changes to HMRC’s approach to tax enforcement and digital information. HMRC inspectors have also been given powers to photograph properties from public roads without the owner’s consent.
Inspectors still need permission to enter a property or its grounds. The powers are relevant to the Government’s plans for a new property tax on homes valued at £2 million or more, scheduled to begin in April 2028.
What the Proposed Rules Mean for Families
The proposed change would give HMRC a longer period in which to request information connected with tax affairs after someone’s death. It would not automatically create an unlimited period for collecting unpaid tax.
For families, the main concern is the possibility of having to locate old financial records years after an estate has been completed. The proposals remain subject to the legislative process, so the final rules and their application could change before they take effect.
