Inheritance Tax Act 1984 section 242

Recovery of tax

Section 242 sets out the conditions that must be met before HMRC can take legal proceedings to recover inheritance tax or interest on tax, and provides an exception where an accelerated payment notice has been issued.

• HMRC cannot take legal proceedings to recover tax or interest unless the amount has been agreed in writing with the taxpayer or has been formally determined in a notice of determination.
• Where the amount has been determined but the taxpayer has lodged an initial appeal, HMRC can only pursue legal recovery of any portion that is agreed or separately determined as not being in dispute.
• The restriction on recovery applies only during a first appeal — once the matter moves to a further appeal, HMRC is no longer prevented from pursuing recovery of the full determined amount.
• Where an accelerated payment notice has been issued under the Finance Act 2014 and has not been withdrawn, HMRC can take legal proceedings to recover the understated or disputed tax specified in that notice, regardless of the normal restrictions.