Inheritance Tax: Some Common Sense?

Many an executor has been baffled by HMRC’s over-zealous reporting requirements in estates where no inheritance tax is actually payable. Executors of ‘Exempt’ estates (for example, where the spousal exemption applies) are currently required to complete full inheritance tax accounts with the various schedules where the estate is worth more than £1 million. This means not only completing the form but also waiting the month or so it takes for HMRC to process it and issue their receipt. This only serves to delay the issue of the grant of probate.  

Fortunately the government is looking to review the reporting requirements – if approved this will mean that many more exempt estates can take advantage of the shorter reporting requirements and save the executors (and HMRC) an awful lot of time and effort. 

A policy with no discernable downside, always nice to see!

For exempt estates, the value limit in relation to the gross value of the estate is increased from £1 million to £3 million with the total amount of trust property including exempt amounts being limited to £1 million.

https://www.gov.uk/government/publications/inheritance-tax-reduced-reporting-requirements/inheritance-tax-reduced-reporting-requirements