IHT Corrective Account UK (2026): When and How to Submit a C4 Corrective Account to HMRC After Probate

A corrective account (Form C4) is an amended inheritance tax return submitted to HMRC when the figures in the original IHT account turn out to be wrong or incomplete: (1) THE ORIGINAL IHT ACCOUNT — IHT400 OR IHT205: before a grant of probate is issued, the executor submits either: (a) IHT400 — a full IHT account for estates that are not excepted estates (broadly, estates above the nil-rate band, estates with non-exempt beneficiaries above the IHT threshold, or estates involving trusts); (b) IHT205 (now replaced by the HMRC digital online service for deaths on or after 01 January 2022) — a short-form return for excepted estates. The original account is based on the executor's best estimate of asset values and reliefs at the time of submission — which may be before the estate has been fully realised or before professional valuations have been completed; (2) WHEN A CORRECTIVE ACCOUNT IS REQUIRED: a C4 corrective account must be submitted when any of the following events occur AFTER the original account was submitted: (a) an asset was undervalued or overvalued in the original account — either because a formal valuation later differs from the estimate used, or because the executor discovers an error; (b) an additional asset comes to light that was not included in the original account (e.g. a bank account the executor did not know about, an uncashed cheque, or a debt owed to the deceased); (c) a liability was incorrectly included or excluded (e.g. a debt that does not qualify for IHT deduction under IHTA 1984 s.5(5) — debts charged on property outside the UK where the situs rules exclude the liability); (d) a relief (agricultural property relief, business property relief) is revised — for example, following a conditional exemption review, or because HMRC challenges the relief on enquiry; (e) the outcome of negotiations with the District Valuer changes the agreed value of real property; (3) THE CORRECTIVE ACCOUNT FORM — C4: the C4 corrective account form is available on HMRC's website (gov.uk/government/publications/inheritance-tax-corrective-account-c4). It requires the executor to set out: (a) the original figures from the IHT400; (b) the revised figures; (c) the difference and any additional IHT payable; (d) the reason for the correction.

The deadline rules for corrective accounts have specific elements: (1) THE GENERAL OBLIGATION TO CORRECT: there is no single statutory deadline for submitting a C4 corrective account expressed in days or months. However, the executor has an ongoing duty of accuracy and MUST submit a corrective account as soon as they become aware that the original account was incorrect. HMRC expects prompt correction — typically within a few months of discovering the error or receiving the revised valuation; (2) THE TAX PAYMENT OBLIGATION — STATUTORY INTEREST: the key financial consequence of a late correction is STATUTORY INTEREST. Interest on unpaid IHT runs from the due date — which is 6 months after the end of the month in which death occurred (IHTA 1984 s.233). For example, for a death in January 2026, the IHT due date is 31 July 2026. If a corrective account reveals additional IHT that was not paid by 31 July 2026, HMRC charges interest on that additional IHT from 31 July 2026 (not from the date the corrective account is submitted). The current HMRC late payment interest rate (as of 2026) is the Bank of England base rate plus 2.5%; (3) PENALTIES FOR INACCURATE ACCOUNTS: under the Finance Act 2007 Schedule 24 (penalty for inaccurate tax returns), an executor who submits an inaccurate original IHT account may face a penalty if the inaccuracy was: (a) careless (penalty up to 30% of lost tax); (b) deliberate but not concealed (penalty up to 70%); (c) deliberate and concealed (penalty up to 100%). In practice, HMRC imposes penalties where the original account was submitted carelessly or where the executor failed to correct a known error promptly. An executor who submits a C4 corrective account voluntarily and promptly is unlikely to face a penalty for the original inaccuracy; (4) THE TIME LIMIT FOR HMRC ENQUIRIES: HMRC has 4 years from the date the account was delivered to open an enquiry into an IHT account, extended to 6 years for careless inaccuracies and 20 years for deliberate inaccuracies (Finance Act 2008 Sch 36).

The most common practical triggers for a corrective account are: (1) DISTRICT VALUER NEGOTIATIONS — PROPERTY REVALUATION: for most estates that include residential property, the executor uses either a solicitor's estimate or a surveyor's valuation for the original IHT account. HMRC's District Valuer (DV) reviews this figure and may propose a higher agreed value. Once the executor and the DV agree on a revised figure, a corrective account must be submitted reflecting the new agreed value. This is the single most common reason for C4 submissions in England and Wales; (2) SALE OF QUOTED SECURITIES BELOW PROBATE VALUE: where quoted shares are sold after the death at a lower price than the probate value used in the original account, the executor may claim Loss on Sale of Quoted Securities relief (IHTA 1984 s.179). The reduced value is submitted via a C4 corrective account and the IHT is recalculated on the lower value. The claim must be made within 12 months of the end of the month of death (s.191); (3) SALE OF LAND BELOW PROBATE VALUE: Loss on Sale of Land relief (IHTA 1984 s.190) applies where qualifying residential or agricultural property is sold within 4 years of death at a lower value than the probate valuation. A C4 corrective account is used to claim the relief; (4) DISCOVERY OF ADDITIONAL ASSETS: it is common for executors to discover further assets during administration — particularly: (a) savings accounts with little-known providers; (b) Premium Bonds not included in the initial estate estimate; (c) forgotten investments, National Savings certificates, or deferred income; (d) deferred pension death benefits (though many are excluded from IHT); (5) INCORRECTLY CLAIMED RELIEFS: if HMRC challenges a business property relief or agricultural property relief claim on enquiry, and the executor agrees to a reduced or withdrawn claim, a C4 must reflect the revised figures; (6) CHANGES TO LIABILITY DEDUCTIONS: where a liability initially deducted from the estate is later found not to be deductible (e.g. a debt secured on foreign property under the Finance Act 2013 s.176 restrictions on non-dom deductions), a C4 corrective account is required.

Where a corrective account results in LESS IHT being due than was originally paid, the executor can reclaim the overpayment: (1) WHERE THE C4 SHOWS AN OVERPAYMENT: the corrective account should show the revised lower figure and the amount of IHT overpaid. HMRC will then: (a) process the repayment; (b) pay statutory repayment interest from the date of the original overpayment to the date of repayment. Repayment interest is currently set at the Bank of England base rate minus 1% (with a floor of 0.5%); (2) HOW TO CLAIM: the C4 corrective account is submitted with a covering letter or note explaining the reason for the reduction and requesting the repayment of overpaid IHT plus interest. HMRC will review the revised figures and process the repayment once satisfied; (3) THE OVERPAID IHT IS REPAID TO THE ESTATE: the repayment is made to the estate (or its solicitors as agents), not to the beneficiaries directly. The executor then distributes the repayment to beneficiaries in accordance with the will; (4) LOSS ON SALE RELIEFS: the most common reason for IHT refunds is the sale of property or quoted shares below probate value (see FAQ 3 above). The time limits for these claims are strict: (a) quoted securities: 12 months after end of month of death (s.191); (b) land: 4 years after death (s.197). Claims outside these windows cannot be made retrospectively; (5) DECEASED DIED POST-06 APRIL 2014 — DIGITAL ACCOUNTS: for deaths on or after 01 January 2022, HMRC moved to an online submission model for IHT accounts. The C4 corrective account is still submitted as a paper form (as of 2026), but HMRC's online guidance directs executors to the paper C4 for corrections to IHT400. Corrections to excepted estate accounts (IHT205 / the online short-form) are handled differently — the executor may need to submit a full IHT400 if the correction moves the estate out of the excepted estate category.

Careful estate administration reduces the risk of needing corrective accounts and protects the executor from personal liability: (1) EXECUTORS' PERSONAL LIABILITY FOR IHT ERRORS: executors are personally liable for IHT under IHTA 1984 s.200(1)(a). If the estate has been distributed and HMRC later assesses additional IHT following a corrective account, the executor may need to: (a) recover assets from beneficiaries (not always possible if the beneficiaries have spent the money); (b) pay the additional IHT personally if the estate has been fully distributed. This personal liability risk makes it essential to ensure the IHT account is as accurate as possible and to submit a corrective account promptly when an error comes to light; (2) OBTAIN PROFESSIONAL VALUATIONS FOR ALL SIGNIFICANT ASSETS: for estates with residential or commercial property, the executor should instruct a RICS-qualified surveyor for a formal probate valuation. While this costs money, it produces a defensible value that is more likely to be accepted (or lead to minor adjustments) by the District Valuer; (3) RETAIN FUNDS FOR POTENTIAL CORRECTIONS: before making the final distribution, the executor should retain a reserve from the estate to cover: (a) any potential additional IHT following District Valuer negotiations; (b) interest on any additional IHT; (c) the executor's own costs. The retained fund can be released to beneficiaries once HMRC has confirmed there are no further IHT liabilities — typically evidenced by a formal IHT clearance certificate (Form IHT30); (4) IHT CLEARANCE CERTIFICATE — FORM IHT30: once the executor is satisfied that all IHT has been paid, they should apply for a clearance certificate from HMRC. The clearance certificate is HMRC's confirmation that it has no further claims against the estate for IHT — providing the executor with confidence to make the final distribution. The clearance does not, however, protect against future corrections if the executor has not disclosed all assets; (5) KEEP RECORDS OF ALL ASSET VALUATIONS: retain all valuation reports, correspondence with the District Valuer, and bank/investment account statements. These records are essential evidence if HMRC opens an enquiry within its 4-year window.