Inheritance Tax Act 1984 section 255

Determination of questions on previous view of law

Section 255 deals with the finality of inheritance tax payments that were made and accepted based on the prevailing understanding of the law at the time, even if that understanding later turns out to have been wrong.

• Where tax has been paid and accepted based on the generally received or adopted view of the law, that settlement is final.
• A subsequent legal decision or other development that shows the original view was wrong does not reopen the settled liability.
• Neither HMRC nor the taxpayer can argue that too much or too little tax was paid by reference to the corrected legal position.
• The correct amount of tax is determined on the basis of the law as it was understood at the time the payment was made and accepted.