Form C4 is the corrective account executors send to HMRC when an IHT400 turns out to be wrong, because an asset was missed, a value has changed, or a debt or relief was overstated. Section 217 of the Inheritance Tax Act 1984 requires a further account within six months of discovering a material defect, but HMRC lets executors save up most changes and report them together once values are final or 18 months after the death, whichever comes first.

When does an IHT400 have to be corrected?

The legal rule is in section 217 of the Inheritance Tax Act 1984. If a person who has delivered an account discovers that it is defective in a material respect, because of anything included in it or left out of it, they must deliver a further account within six months of that discovery, containing whatever information is needed to remedy the defect. HMRC’s Inheritance Tax Manual at IHTM10805 restates this and names the form: a corrective account, or a corrective inventory in Scotland.

Typical triggers are:

  • an asset found after the IHT400 was sent, such as a forgotten bank account, Premium Bonds or a share of another estate;
  • a value that changes once it is agreed, for example after the Valuation Office Agency or Shares and Assets Valuation reviews a figure;
  • estimates on the original account that are replaced by final figures;
  • a debt or funeral cost that turns out to be lower, or a relief or exemption that is not fully due;
  • a liability that was missed, which reduces the estate.

Corrections run in both directions. The C4 has separate sections for increases (assets worth more, new assets, liabilities or reliefs reduced) and decreases (assets worth less, new liabilities, reliefs increased). IHTM10702 says that, strictly speaking, a C4 should be completed whenever the account is amended, and HMRC can insist on one where a repayment is doubtful or the changes are numerous or complicated. The original form is explained in our guide to completing the IHT400.

What is the deadline, and can changes be saved up?

The statutory deadline is six months from discovery. In practice HMRC relaxes this. IHTM10806 allows executors to save up amendments and send them in one go, unless any of these apply:

  • HMRC has written to say it is starting a compliance check;
  • the estate includes a qualifying interest in possession in settled property or a gift with reservation;
  • the overall change in the estate is more than £50,000 before exemptions or reliefs;
  • the changes relate to the value of buildings, real property or unlisted shares;
  • the changes relate to a claim for loss on sale of property or shares;
  • assets have been sold on which tax is being paid by instalments.

Where saving up is allowed, the C4 goes in when the executors believe the values are final or when 18 months have passed since the death, whichever is earlier. If the estate is still not settled after 18 months, changes must again be reported as they arise. GOV.UK gives the same rule: tell HMRC once values are final or 18 months after the death, whichever is sooner, and before then only for the listed cases. IHTM36106 confirms HMRC should not seek a penalty for a late corrective account where saving up was permitted.

What goes on the form?

The current C4 (HMRC version 01/25) is three pages, with a continuation sheet C4(C) for longer lists.

Boxes What they cover
1 to 6 Deceased’s name, inheritance tax reference, date of death and the contact dealing with the estate
7 to 9 Increases in asset values, assets not on the IHT400 (previous value shown as nil) and decreases in liabilities, exemptions or reliefs
10 to 12 Decreases in asset values and increases in liabilities, exemptions or reliefs
13 and 14 The estate value from box 108 of the IHT400, or from HMRC’s last calculation, and the revised value
15 to 17 Tax now due, tax already paid and the amount payable or repayable

Each line shows the previous value, the amended value and the difference. Executors acting without a professional adviser may leave boxes 15 to 17 blank and HMRC will calculate the tax. A section headed “Reporting a change”, added in January 2025, asks for the reasons where the change concerns stocks and shares, property or buildings, or removes an asset entirely. The form also collects bank details for any repayment, which HMRC makes by Faster Payments.

IHTM10703 says every accountable person should sign the C4 and that an agent acting for them must not sign it. In Scotland the equivalent is form C4(S), which also serves as a corrective inventory to obtain an eik to confirmation (IHTM10701).

What should not go on a C4?

  • Losses on sale. The C4 cannot be used to reduce the value of property or shares because they were later sold for less. Relief is claimed on IHT38 for property sold at a loss within four years of the death, and IHT35 for shares sold at a loss within 12 months.
  • Transferable nil rate band. Changes to the unused nil rate band available from an earlier death are notified by letter, not on a C4.
  • Estates that stop being excepted. If the executors relied on the excepted estates rules and the estate no longer qualifies, IHTM06034 requires a full IHT400 within six months of establishing that, rather than a C4.

How do interest and payment work when more tax is due?

Inheritance tax must be paid by the end of the sixth month after the death to avoid interest, so any extra tax revealed by a correction carries interest from that date, not from the date the C4 is sent. IHTM10806 is explicit that interest is still charged where amendments are saved up. GOV.UK tells executors to calculate the additional tax and make a payment on account to stop interest running, with HMRC sending final calculations once it has everything. Where tax on property is being paid by instalments, a sale of that asset is one of the events that must be reported straight away.

What penalties apply to late or wrong corrections?

Section 245 of the 1984 Act applies to a failure to deliver an account under section 217 as well as the original account. The penalty is £100, with a further £100 if the account is still outstanding six months after the section 217 deadline and no proceedings have started. A reasonable excuse removes the penalty if the account follows without unreasonable delay once the excuse ends (section 245(7)); see reasonable excuse.

For deaths on or after 1 April 2009, inaccuracy penalties come from Schedule 24 to the Finance Act 2007 (IHTM36103 points caseworkers to the Compliance Handbook). Paragraph 3(2) of that Schedule treats an innocent error as careless if the person later discovers it and does not take reasonable steps to tell HMRC. IHTM10705 reminds caseworkers that penalties can apply to an omission or undervaluation even when the executors found it themselves, so prompt correction is the main protection.

How does this look in practice?

Illustration only. Margaret dies on 12 February 2026. Her executors send an IHT400 in June 2026; her nil rate band is fully used, so further assets bear tax at the standard 40% rate. In October 2026 they find a savings account worth £9,000, and an income tax repayment estimated at £500 is confirmed at £1,500.

  • The total change is £10,000, under £50,000, and involves no buildings or unlisted shares, so the executors may save it up.
  • Extra tax is 40% of £10,000, which is £4,000. Interest on it runs from 1 September 2026, because tax was due by 31 August 2026.
  • They make a £4,000 payment on account in October 2026 to stop interest, then send one C4 when the estate is finalised, and no later than 12 August 2027.

If instead her house sold for far more than its probate value, that is a change in the value of a building and would need reporting without waiting, and any loss on a sale would go on IHT38, not the C4.

What are the common mistakes?

  • Letting a solicitor or accountant sign the C4 instead of every accountable person.
  • Assuming saving up is always allowed when a compliance check is open, a trust interest or gift with reservation is involved, or a building has been revalued.
  • Waiting to file and forgetting that interest runs from the end of the sixth month after death.
  • Using the C4 for losses on sale rather than IHT35 or IHT38.
  • Taking box 13 from the original IHT400 when HMRC has since issued a later calculation.
  • Leaving the “Reporting a change” reasons blank for share or property changes, which invites questions.

Executors handling an estate professionally may also want to read our guide for accountants acting as executors and our note on paying inheritance tax before probate.

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Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 8 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.