An Easing of Inheritance Tax Reporting Requirements

Perhaps not the most exciting of posts this time but if you are, or are about to prepare an inheritance tax account, these developments may be just what you are looking for.

HM Revenue & Customs have released a policy paper extending the circumstances where information can be provided to HM Revenue & Customs in place of full inheritance tax accounts. Certain definitions have also been clarified and time limits extended.

The revisions will apply to deaths in England, Wales and Northern Ireland from 1 January 2022 and are as follows:

The monetary limits for the provision of information to HM Revenue &  in place of an inheritance tax  account for low value and exempt excepted estates are increased as follows:

  • The limit for the aggregate of chargeable transfers and exempt ‘out of income’ transfers made prior to death is increased from £150,000 to £250,000.
  • The limit for chargeable trust property is increased from £150,000 to £250,000.

For exempt estates:

  • The gross value limit of the estate is increased from £1 million to £3 million with the total amount of trust property, including exempt transfers, being limited to £1 million.

Estates of non-UK-domiciled individuals are not excepted estates if:

  • Chargeable gifts over £3,000 were made in the seven years prior to death.
  • It contains overseas property which has value attributable to UK residential property.

The definition of the inheritance tax threshold is amended to reflect the nil-rate-band  multiplier where unused nil-rate-band is transferred to the deceased. This allows certain estates where some of the nil-rate-band was used on the earlier death to qualify as an excepted estate.

The information is now to be provided by the UK Court Services to HM Revenue & Customs  within 30 days from the grant of probate or confirmation an increase from the previous seven days.

HM Revenue & Customs may make enquiries into the estate up to 60 days from the grant of probate or confirmation.


Happy 5 November !!!


Stephen Parnham