Inheritance Tax Act 1984 section 250

Time limit for recovery

Section 250 sets a time limit within which HMRC must take action to recover penalties relating to inheritance tax.

• HMRC cannot pursue penalties indefinitely — a strict three-year time limit applies.
• The three-year period begins on the date HMRC notifies the liable person (or one of them) of the correct amount of tax due on the chargeable transfer.
• Once the three-year window has closed, no penalty proceedings may be brought before the First-tier Tribunal, nor may a penalty be included in a negotiated settlement.
• The time limit applies to all penalties under Part X of the Inheritance Tax Act 1984.