HMRC announces an updated approach to the clearance process and timeline for IHT100 forms
In HMRC’s recent Trusts and Estates Newsletter for April 2022, they announced changes altering the timeline for processing IHT100 forms once they have been submitted.
But what is an IHT100 form, and when do you need to use one? In this article, we provide a brief overview of IHT100 forms and details of the changes that have recently been announced by HMRC.
What is an IHT100 form?
An IHT100 is a collection of forms and supplementary pages, and it is designed to be used to tell HMRC about any ‘chargeable events’ which may result in inheritance tax becoming due on a trust or a gift.
When do you need to submit an IHT100 form?
You are required to submit an IHT100 form when a chargeable event occurs. Examples of chargeable events include:
- A lifetime transfer that is chargeable to inheritance tax at the time that it is made
- A potentially exempt transfer made by a transferor who does not survive seven years following the date of that transfer
- Property being gifted subject to a reservation
- Property ceasing to be held on discretionary trusts
- The termination of an interest in possession in settled property within seven years of the death of the life tenant
- The termination of an interest in possession in settled property arising as a result of the life tenant’s death
- A principal charge arising on the ten-year anniversary of a discretionary trust
- A flat rate charge arising because a special trust no longer meets the conditions for any special tax treatment (for example, if the trust stops having charitable status or its beneficiaries have reached a certain age)
Changes to the IHT100 form timeline
In their recent newsletter, HMRC announced some improvements to the timeline for dealing with IHT100 forms. Following submission of an IHT100 form, HMRC will now confirm safe receipt in writing. When confirming safe receipt, HMRC will also provide a date by which the person submitting the form will hear from HMRC in relation to their submission (12 weeks following the date of HMRC’s written confirmation of receipt). If no correspondence is received from HMRC by that date, the person who submitted the IHT100 form may assume that HMRC has no further queries to raise. This updated guidance applies to IHT100 forms submitted on or after 20th April 2022.
In addition, the newsletter sets out that when HMRC decides to open a compliance check in relation to an IHT100 form, they will write to the taxpayer to let them know when that compliance check has come to an end. However, they will not issue a standard clearance letter; if you wish to apply for clearance, you must use an IHT30 form.
Further changes may be issued by HMRC, and we will keep you updated if and when these changes happen.
Specialist administrating and managing Trusts solicitors
If you would like advice about an IHT100 form, please contact our friendly team of administrating and managing Trusts solicitors. Please get in touch by calling 0117 906 9400, email firstname.lastname@example.org or use our contact form.