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Legal News | 27.01.22

New year, new HMRC procedures

HMRC has recently changed its reporting requirements when a person dies; this change applies to deaths that occur on or after 1 January 2022.

Where a person dies on or after 1 January 2022 and their estate qualifies as an ‘excepted estate’, HMRC no longer requires a full Revenue Account to be completed. For these purposes, an ‘excepted estate’ usually means one of the following applies:

• The value of the estate is below the current threshold (£325,000);
• The estate is worth less than £650,000 and there is an IHT free allowance to be carried forward from a spouse/civil partner’s estate;
• The deceased left everything to their UK based spouse/civil partner or a charity and the estate is worth less than £3 million; or
• The deceased was living permanently outside of the UK when they died and the value of their estate was less than £150,000.

Instead of completing a full Revenue Account (IHT205 and IHT217), it will only be necessary to include estimates of the deceased’s estate when an application for a Grant of Representation is made to the Probate Registry.

For deaths that occurred before 1 January 2022 and where the deceased’s estate was an ‘excepted estate’, the process remains as it was, a Revenue Account must be completed in all cases, as well as a separate application for a Grant of Representation.

While some estates may fall within the new ‘excepted estates’ arrangement, for those more complex estates where, for example, substantial lifetime gifts have been made, the deceased held foreign property, the deceased benefited from a trust or inheritance tax is payable, a full Revenue Account (IHT400) will need to be completed. We are here to guide you through the process and ensure that all relevant reliefs and exemptions are claimed so as to minimise any inheritance tax that may fall due.

If you have any questions about the outlined changes or if you need assistance with the probate process, please get in touch with your usual contact at Wansbroughs or email us at wealth@wansbroughs.com.


Posted By Our Wills, Tax, Trusts & Probate Team