A woman died in October 1999 and her estate included a house and its contents in Scotland and a cottage in England. Her executors, one of whom was a solicitor, wished to sell the properties as soon as possible. In November the solicitor (R) submitted an inventory of S's estate to the Capital Taxes Office, showing the Scottish house at a value of £60,000; its contents at £5,000; and the English cottage at £50,623. Although the solicitor had instructed valuers to carry out valuations of the two properties, he had not received these valuations at the time of submitting the inventory. Later that month the contents of the Scottish house were valued at £24,845, and in December the house was sold for £82,000. In January 2000 the English cottage and its grounds were valued at £315,000. R submitted a corrective inventory to the Capital Taxes Office, and paid the additional IHT due. The CTO informed him that they considered that the executors had not made 'the fullest enquiries that are reasonably practicable', as required by IHTA, s 216(3A), and they proposed to charge a penalty of £9,000, under IHTA, s 247.
It was held that the solicitor was not liable to any penalty, since he had made the fullest enquiries that were reasonably practicable in the circumstances, and had acted in accordance with accepted practice. On the evidence, both executors had made a thorough examination of S's home shortly after her death and had arranged for a valuation of the contents would be required, and had instructed a valuation promptly. In the meantime, he had, in accordance with accepted practice, inserted estimated valuations in the inventory and had disclosed that they were estimates. He had acted 'in accordance with the common or standard practice adopted by solicitors of ordinary skill exercising ordinary care in such circumstances'. He had 'acted prudently throughout and exercised reasonable care in his capacity as executor'.