Replacement home

The will of our late client D (who died in 2007) directed that his partner G should live in his house free of charge etc. until her death. Because G’s daughters and other members of her family lived some 250 miles away the trustees to whom the house was given free of inheritance tax sold the house and bought her a replacement nearer to her family (as this was allowed by the will).

However this accelerated the payment of inheritance tax as previously the house was an instalment asset and HMRC consider that the new property did not qualify.

Can this be contested especially as all funds have been reinvested long term leaving nothing with which to meet this unexpected liability?

During the existence of the will trust G has enjoyed a legacy of £50 000 and an annuity of £25 000 per annum net...