Trusts and Estates: What’s New May 2022

HMRC's latest Trusts and Estates newsletter contains some useful information. Here is our enhanced version. 

Trust Registration Service deadlines

• The deadline for registering most trusts on the Trust Registration Service (TRS) is 1 September 2022.

Trusts that are not taxable

• The deadline to register non-taxable trusts in existence on 6 October 2020 is 1 September 2022.
  • This also applies if the trust has since been closed.
• Non-taxable trusts created after 6 October 2020 must register by the latter of:
  • 90 days of being created or otherwise becoming registerable.
  • 1 September 2022.

Taxable trusts created on or after 6 April 2021

• Taxable trusts must register by the latter of: 
  • 90 days of the trust becoming liable for tax.
  • 1 September 2022.
• Taxable trusts that were created before 6 April 2021 are subject to different registration deadlines.

See Trust Registration Service

Capital Gains Tax on UK Property Account

Guidance for the Capital Gains Tax on UK Property Account 

• HMRC published detailed guidance on the Capital Gains Tax on UK Property Account used to report and pay Capital Gains Tax due on disposals of UK Property on 17 December 2021. 
• This was updated on 16 January 2022 and can be found in Appendix 18 of the Capital Gains Tax Manual.
• This guidance provides further information for UK and non-UK residents, agents, personal representatives and trustees on: 
  • Accessing and submitting the Capital Gains Tax on UK Property Account. 
  • The interaction between the Capital Gains Tax on UK Property Account and Self Assessment.

See CGT: Payment of tax

Self Assessment and Capital Gains Tax on UK Property Account

• Where a taxpayer comes to make a Self Assessment return and realises they should have made a CGT claim on a UK Property Return during the tax year (30/60 days from the date of completion), they should first submit a CGT on UK Property Return before submitting an SA return.

Addresses for the administration of estates post

• To ensure post regarding tax on income and gains (other than the Capital Gains Tax on UK Property Account) during the post-death administration period reaches the appropriate teams, the below postal addresses should be used: 
• • HMRC Administration of Estates, BX9 1EL, United Kingdom: for complex estates correspondence including appeals and Trust and Estate returns SA900.
  • HMRC Administration of Estates, BX9 1AS, United Kingdom: for informal procedures notifications.
• You do not need to add a building name or town.
• Couriers should use a different address.
• These addresses should not be used for Inheritance Tax correspondence.

See Estates: Income Tax and Capital Gains Tax

What to do when someone dies a step-by-step guide

• The step-by-step GOV.UK guidance on What to do when someone dies has recently been updated.

Inheritance Tax GOV.UK detailed guidance

HMRC's reviews of the Inheritance Tax detailed guidance pages GOV.UK have led to the following pages being updated:

• Work out Inheritance Tax due on gifts
• Valuing Stocks and Shares for Inheritance Tax
• Transferring unused basic threshold for Inheritance Tax 

See IHT: Transferable Nil-Rate Band

Inheritance Tax YouTube Series

A series of Inheritance Tax themed videos have been published on HMRC’s YouTube channel covering the following topics:

• What is Inheritance Tax?
• Check if you need to apply for probate.
• How do I value the estate of someone who's died? 
• How and when do I pay Inheritance Tax when someone has died? 
• How will changes to Inheritance Tax affect me? 

See Changes to IHT reporting & increases to probate fees and HMRC tool: Check if you might need to pay Inheritance Tax

IHT100

For forms received after 20 April 2022:

• HMRC will write to you and let you know they have received your form IHT100 and provide you with a date 12 weeks in the future by which you can expect to hear from them if they have any questions. If you do not hear from HMRC by the date given,  you can assume they do not have any questions.

Changes to the process for clearance for Trust and Lifetime charges form IHT100s

• In cases where HMRC open a compliance check into a form IHT100, they will write to advise when the compliance check is ended.
  • In other cases, HMRC will not issue a standard clearance letter.
• If you want to apply for clearance, you should use form IHT30 ‘Application for a clearance certificate’.
  • Where the form IHT100 relates to a transfer arising during the lifetime of the transferor, HMRC may not be able to issue a clearance certificate as a future event may change the tax due in respect of that transfer.
  • More detail is set out in chapter 40 of IHTM40000.

To avoid delays: 

• Make sure that you answer all relevant questions in the form IHT100.
• Take care when you tell HMRC which schedules are included and make sure they are completed and enclosed.
• Enclosing a copy of relevant documents if they are requested.

See Trusts & Estates: Ten-year charge reporting requirements and Trusts & Estates: Exit charge reporting requirements

Use of form C4 corrective accounts 

• Form C4 corrective accounts should not be used to report a decrease in the value of listed stocks and shares, or land and buildings, where the decrease is the result of a sale
  • Form IHT35 should be used in the case of stocks and shares sold within 12 months of the date of death where the gross sale price is less than the value returned on the form IHT400. 
  • Form IHT38 should be used in the case of land and buildings sold within four years of the date of death where the gross sale price is less than the value returned on the form IHT400.
• The C4 corrective account should only be used to report amendments to the value of assets and liabilities returned in the form IHT400: 
  • Where it is discovered that the date of death value was incorrect.
  • To report assets or liabilities not previously returned on the form IHT400.

External link

HMRC Trusts and Estates Newsletter: April 2022