Postby someone » Sun Apr 11, 2021 4:44 pm
https://www.taxation.co.uk/articles/2013-08-28-312541-treatment-compensation-iht-purposes-confirmed
From the HMRC newsletter:
The right to pursue a claim can be
valuable whether or not the
individual entitled to make the claim
was aware of this right, provided
that the information was capable of
being known at the relevant date.
I don't know if this means if you didn't know you could make a claim and couldn't have known you could make a claim then you don't have to pay IHT on the compensation payment. But given that you said it was multiple years from death to when you became aware that a claim was possible then it sounds likely that some event postmortem was the key point when "the information was capable of being known" so I think there's at least a chance that this compensation falls outside of IHT.