Following amendments to Inheritance Tax Regulations earlier in the year, changes to IHT reporting requirements will be effective from 1st January 2022.
Changes that will be effective for the death of individuals from 1st January include the extension of some thresholds, meaning that more estates will fall within the excepted estates thresholds and use of form IHT205 , rather than IHT400 will be permitted.
For exempt estates, the new threshold for the gross value of the estate limit will be £3m, increased from £1m, with the total amount of property held in a single settlement being increased from £150,000 to £1m in most cases. The limit on specified transfers in the seven years before death is increasing from £150,000 to £250,000.
Whereas low value estates will see an increase on the limit on trust assets and the limit on specified transfers in the seven years before death from £150,000 to £250,000.
The current requirement for the full transferable nil rate band to be available on second death is also being removed as part of the changes.
Updates to MyHMCTS will occur between 1st and 12th January 2022 to ensure practitioners comply with regulations. During this time, HMCTS has requested that submissions of probate applications for estates impacted by the new regulations are avoided.
The changes are expected to significantly reduce the reporting and administrative requirements for 90% of non-taxpaying estates requiring probate or confirmation, and the expected reduction in cases where IHT400 forms must now be completed should also save, HMRC and clients alike, both time and money.
For advice call our team on 0203 488 7503, 01992 236 110 or contact us by email at welcome@walshwestcca.com or via our website www.walshwestcca.com
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