The Inheritance Tax (Delivery of Accounts) (Excepted Estates) (Amendment) Regulations, SI 2021/1167 extend a number of the limits for qualifying excepted estates so that, from 1 January 2022, over 90% of non-taxpaying estates will not have to deliver IHT accounts to HMRC before a grant of representation (or confirmation in Scotland) is made.
The regulations extend several of the conditions in the Inheritance Tax (Delivery of Accounts) (Excepted Estates) Regulations, SI 2004/2543 to enable the exemptions to apply more widely.
The changes affect two categories of excepted estates:
for small estates (i.e. where the gross value of the estate does not exceed the IHT threshold), the limits on the value of both trust property and specified transfers in the seven years before death are increased from £150,000 to £250,000; and
for exempt estates (i.e. where the gross value of the estate exceeds the IHT threshold but the net value after liabilities and spouse or charity exemptions does not exceed the threshold), the limit on the gross value of the estate is increased from £1m to £3m (but the total amount of trust property including exempt amounts is limited to £1m), and the value limits in relation to both chargeable trust property and specified transfers in the seven years before death are increased from £150,000 to £250,000.
The regulations simplify the information small estates and exempt estates are required to provide to HMRC in place of IHT accounts, and extend the mandatory time period in which information is to be sent to HMRC to within one month of the issue of the grant of probate (rather than one week).
Where the required information has been provided in accordance with the 2004 Regulations, the person providing the information will be discharged from any claim for tax after 60 days rather than the existing 35 (aligning with the existing 60-day period in Scotland).
The regulations will come into force on 1 January 2022 and will have effect in relation to deaths occurring on or after that date.
The Inheritance Tax (Delivery of Accounts) (Excepted Estates) (Amendment) Regulations, SI 2021/1167 extend a number of the limits for qualifying excepted estates so that, from 1 January 2022, over 90% of non-taxpaying estates will not have to deliver IHT accounts to HMRC before a grant of representation (or confirmation in Scotland) is made.
The regulations extend several of the conditions in the Inheritance Tax (Delivery of Accounts) (Excepted Estates) Regulations, SI 2004/2543 to enable the exemptions to apply more widely.
The changes affect two categories of excepted estates:
for small estates (i.e. where the gross value of the estate does not exceed the IHT threshold), the limits on the value of both trust property and specified transfers in the seven years before death are increased from £150,000 to £250,000; and
for exempt estates (i.e. where the gross value of the estate exceeds the IHT threshold but the net value after liabilities and spouse or charity exemptions does not exceed the threshold), the limit on the gross value of the estate is increased from £1m to £3m (but the total amount of trust property including exempt amounts is limited to £1m), and the value limits in relation to both chargeable trust property and specified transfers in the seven years before death are increased from £150,000 to £250,000.
The regulations simplify the information small estates and exempt estates are required to provide to HMRC in place of IHT accounts, and extend the mandatory time period in which information is to be sent to HMRC to within one month of the issue of the grant of probate (rather than one week).
Where the required information has been provided in accordance with the 2004 Regulations, the person providing the information will be discharged from any claim for tax after 60 days rather than the existing 35 (aligning with the existing 60-day period in Scotland).
The regulations will come into force on 1 January 2022 and will have effect in relation to deaths occurring on or after that date.
