Changes to Inheritance Tax Reporting Rules

VIEW CATEGORIES

On 1 January 2022 the Inheritance Tax (Delivery of Accounts) (Excepted Estates) (Amendment) Regulations 2020 came into force. These regulations changed the Inheritance Tax (IHT) reporting requirements for estates below the IHT threshold.

Previously, if a person died, domiciled in the UK, when applying for probate it was necessary to complete and submit an IHT return, regardless of the size of the estate.

The new rules apply in relation to deaths on or after 1 January 2022. In most cases, if an estate is worth less than £1 million and there is no IHT to pay, it will not be necessary to submit an IHT return. In those cases, the probate application can be made by simply confirming to the Probate Registry the value of the estate for IHT purposes, within the application form.

There are some exceptions, in particular where an estate contains foreign assets over a certain value or the deceased had an interest in a Trust of a certain size but the vast majority of modest estates will benefit from this new rule. Not only will there be less paperwork to complete but this change should also speed up the process of obtaining probate, on the basis that the Probate Registry will no longer need to look at IHT forms.

If you need any advice or assistance in relation to the administration of an estate, please contact Vicky Bligh.