Guidance

HMRC Trusts and Estates Newsletter: August 2024

Updated 28 August 2024

Welcome to the August 2024 edition of the HMRC Trusts and Estates Newsletter.

We do not have a mailing list for the newsletter.

Update to Inheritance Tax IHT100 Forms

HMRC have been working to update and streamline the IHT100 suite of forms, consistent with the recommendation made by the former Office of Tax Simplification. We would like to thank representative bodies for their contribution in reviewing the forms.

Previously, customers were required to complete form IHT100, an additional event form, and supplementary schedules D31 to D40 to notify HMRC about each chargeable event when Inheritance Tax is payable on a trust or gift.

Customers are now only required to complete and submit a specific IHT100 form depending on the chargeable event, along with the relevant supplementary schedules D31 to D39.

Example

Where the chargeable event involves notifying HMRC about the ending of a qualifying interest in possession in settled property and there were assets outside the United Kingdom, revised form IHT100b as well as schedule D39 would need to be completed.

The new forms to be used are: 

• IHT100a Gifts and other transfers of value 
• IHT100b Termination of a qualifying interest in possession
• IHT100b(death) Assets held in trust 
• IHT100c Relevant property trusts proportional (exit) charge
• IHT100d Relevant property trusts principal (10 year) charge 
• IHT100e Charges on specialist trusts 
• IHT100f Heritage exempt property 
• IHT100h Assets ceasing to be held in an age 18 to 25 trust 
• IHT418 Assets held in trust 
• D31 Domicile outside the United Kingdom 
• D32 Stocks and shares
• D33 Debts due to settlement or trust 
• D34 Life insurance and annuities 
• D35 Household and personal goods 
• D36 Land, building and interests in land 
• D37 Agricultural Relief 
• D38 Business relief, business or partnership interests 
• D39 Foreign assets 

Links to all these forms are on the Inheritance Tax forms page on GOV.UK.

The new form IHT100b(death) allows the trustees to notify HMRC about a person’s interest in a qualifying interest in possession trust that has come to an end on their death.

The IHT418 remains a dual-purpose form to be used by the executors, or the executors who are also trustees, to notify HMRC about the coming to an end on death of a person’s interest in a qualifying interest in possession trust. 

HMRC will continue to accept the previous versions of the IH1T00 forms and schedules until 31 December 2024.

Guidance pages on Inheritance Tax and Trusts have been updated on GOV.UK to reflect these changes.

Changes to the way we share information needed for probate and confirmation applications

HMRC and the Court Services continue to work together to improve the customer experience for probate, confirmation and Inheritance Tax customers. 

We confirmed a change to our processes in the March 2024 Trusts and Estates Newsletter which meant customers applying for probate in England and Wales no longer needed to complete the IHT421 probate summary. Instead, we explained that we would send a unique code and details of estate values by post once the form IHT400 was processed, allowing customers to make their application for probate.

Where an estate is not an excepted estate, applications for probate are no longer possible without the unique code and confirmation of the estate values.

This change meant that customers have one less form to complete and they can also begin their probate application at the right time, avoiding it being paused and causing unnecessary delays.

We’re committed to continuously improve our processes, so in response to customer feedback, we’re updating the form IHT400. Customers will be asked to provide their email address and sign a disclaimer when completing the form if they wish to receive their unique code by email instead of through the post. This will speed up the process and allow the probate or confirmation to be submitted earlier.

The customer’s email address will be used for the specific purpose of notifying the unique code, no other correspondence can be entered into by email and no other documentation submitted. All forms and documentation should still be submitted to HMRC by post.

If HMRC are unable to issue a unique code, the customer will receive a letter in the post to state what action is required.

This change applies to probate applications in England and Wales.

For Scottish estates we will email the letter required for confirmation (SL189).

Northern Ireland estates are not affected by these changes.

These improvements form part of our commitment to make things easier for our customers, which is one of our HMRC Charter standards.

Administrative change to ease the payment of Inheritance Tax before probate or confirmation

The March 2024 Trusts and Estates Newsletter set out that from 1 April 2024, changes had been made where personal representatives of estates are applying to obtain a ‘grant on credit’ from HMRC.

Revised guidance explaining this change has been published on GOV.UK.

Tell HMRC about who is dealing with the estate when someone dies

As a result of improvement suggestions from our agent liaison groups, HMRC has now published form P1000 on GOV.UK.

This form allows personal representatives of a deceased person’s estate to pro-actively engage with HMRC to tell us their details and details of any agents. HMRC’s Bereavement team will contact the persons noted on the P1000 form in dealing with the tax affairs of an individual up to the date of death, and for Income Tax and capital gains of ‘informal’ administration periods.

This process change is intended to speed-up dealing with an estate. 

The form P1000 does not replace other means of notifying HMRC, in particular for Inheritance Tax or any ‘agent handshakes’ required by online services. 

If the personal representative cannot use the form P1000, they should usually receive a letter within 40 days if they have used the Tell Us Once service to report that someone has died to a number of government departments. Otherwise, they should call the Bereavement and deceased estate helpline and clearly say they want the Bereavement Helpline to get through to the right queue quickly.

Agents should also use the Bereavement and deceased estate helpline when dealing with deceased estates rather than the Agent Dedicated Line, to ensure they speak to the right adviser immediately.

Tax returns for low income trusts that cease in the 2024 to 2025 tax year

The March 2024 Trusts and Estates Newsletter described the introduction of a tax-free (de minimis) amount for income of trusts and estates.

The changes were included in Finance (No.2) Act 2023 and came into effect for tax year 2024 to 2025 onwards.

Broadly, from 6 April 2024, trusts and estates with income of all types up to £500 will not pay Income Tax on that income as it arises. Where income exceeds that amount, tax will be payable on the full amount.

For accumulation and discretionary trusts with income that exceeds £500, the default basic rate (20%) and dividend ordinary rate (8.75%) will no longer apply to the first £1,000 slice of trust rate income (commonly referred to as the standard rate band).

HMRC accept in-year paper returns on cessation of a trust. For customers who cease in 2024 to 2025, the 2023 to 2024 paper return should be used. Please ignore box 9A.1 (the amount of standard rate band) as this will not apply.

The Trust and Estate tax return for 2024 to 2025 will be updated to reflect the changes.

Updates to the Trust Registration Service (TRS) guidance

We have published new guidance in the HMRC Trust Registration Service Manual at TRSM90000, which provides detailed instructions on how to use the TRS to register a trust and common errors that might be encountered during the registration process.

This guidance replaces the ‘How to register’ help card issued by the Trusts Helpline.

We will make further updates to TRSM90000 to replace all TRS-related help cards later this year.

Changes to the taxation of non-UK domiciled individuals 

From 6 April 2025, the government will remove the outdated concept of domicile status and implement a new residence-based regime which is internationally competitive and focused on attracting the best talent and investment to the UK.

A residence-based system for Inheritance Tax will also be introduced.

A policy paper has been published which sets out the government’s commitment to reform this area of the tax system. 

Further details will be published on GOV.UK in due course.

Queries or comments about any of the announced changes can be emailed to personaltaxinternational@hmrc.gov.uk. 

This mailbox is being monitored but during the development of this policy we will not be responding to any emails directly. Instead, we will use those comments when considering future updates. This will help ensure that the same information is made available to all interested parties at the same time.