HMRC have recently released details of the value of assets held in UK taxpaying discretionary trusts at the ten yearly charge date, and have confirmed that information for more recent years is deemed to be incomplete because of delays by trustees in submitting accounts to HMRC.

All UK trusts (with a few exceptions) created on or after 22 March 2006 are subject to potential IHT charges on each ten-year anniversary: 

  • The trustees are required to submit an account to HMRC using form IHT100, even if there is no tax to pay, unless the settlement qualifies as an excepted settlement.
  • The IHT forms and any tax payable are due six months from the end of the month in which the ten year anniversary occurs.
  • Interest and penalties may be charged for late payment and filing.

The filing and payment deadline for trusts with ten-year anniversaries during 2016/17 could have been no later than 31 October 2017, yet the HMRC figures compiled in May 2018 show that in comparison to earlier years and the previous ten-year charge date (2006/07), up to 75% of trusts had apparently not yet filed an IHT100 return in respect of the ten year charge. Some of these returns could now be more than 20 months late meaning that HMRC could apply daily penalties once the returns are filed.

Judging by HMRC’s figures and the number of queries we see from accountants and trustees where the ten-year charge has been overlooked it seems that whilst this charge has been in place for all trusts for over 12 years, many trustees are still failing to deal with it on a timely basis, if at all.

If you need help in calculating and reporting trust ten year (or other) charges contact our Virtual Tax Partner service for assistance.


UK trusts 

Trusts & Estates: Ten-year charge reporting requirements 

Penalties: IHT late filing of accounts 

External links:

HMRC: Inheritance tax statistics: Table 12.7 - assets held in taxpaying discretionary trusts at ten yearly charge date


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