Guidance

HMRC Trusts and Estates Newsletter: December 2021

Updated 28 August 2024

Welcome to the December 2021 edition of the HM Revenue and Customs (HMRC) Trusts and Estates Newsletter.

We do not have a mailing list for the newsletter.

Capital Gains Tax Payment for Property Disposal Service

There were 2 changes to the Capital Gains Tax (CGT) Payment of Property Disposals (PPD) service rules announced at the recent Budget.

Time limits

Individuals, trustees and personal representatives of deceased persons, will now have 60 days instead of 30 days to report and pay any tax due on UK land and property disposals. The government has listened closely to feedback from stakeholders about their experience of the PPD service, and also noted the Office of Tax Simplification’s recommendation within their second report Capital Gains Tax – second report: Simplifying practical, technical and administrative issues. The extension to 60 days will allow more time for customers to produce and provide accurate figures as well as sufficient time to engage with advisers.

Customers and their agents:

• have 60 days from the completion date to report and pay tax on a disposal of UK land and property that results in CGT having to be paid if the completion date for the disposal was on or after 27 October 2021
• still have 30 days from the completion date to report and pay tax on a disposal of UK land and property that results in CGT having to be paid if the completion date was before 27 October 2021

Customers can report and arrange to pay any tax due through our online service or by contacting their tax agent.

Mixed use property

The rules have been clarified for UK residents so that where a gain arises in relation to a mixed use property, only the portion of the gain that is the residential property gain is to be reported and paid using PPD. A mixed use property is one that has both residential and non-residential elements.

Raising standards in the tax advice market

On Tax Administration and Maintenance Day, the government published the summary of responses and next steps following the consultation earlier this year on whether to introduce a requirement for mandatory professional indemnity insurance (PII) for tax advisers, and defining tax advice.

After carefully considering the responses, the government has decided not to introduce a requirement for mandatory PII for tax advisers at this time. The feedback was clear that, on its own, PII would not be an effective mechanism to raise standards or have a meaningful impact on consumer protection.

Instead, there will be a consultation in 2022 on options to improve the wider regulatory framework around standards in tax advice, it will also include a proposed definition of tax advice.

The summary of responses and next steps document also provides an update on the remaining commitments included in the Call for evidence: raising standards in the tax advice market.

Alongside this, we have published externally commissioned research on Understanding the characteristics of unaffiliated tax agents on GOV.UK. The research improves our understanding of tax advisers who are not members of a professional body and it will feed into our strategy on raising standards in the tax advice market.

This work forms part of HMRC’s Tax Administration Strategy and supports the Government’s vision to improve resilience and effectiveness of the tax system and support taxpayers.

Inheritance Tax reporting requirements

In our May 2021 newsletter we highlighted the government’s announcement that changes would be made to the Inheritance Tax reporting requirements for non-taxpaying estates. The Inheritance Tax (Delivery of Accounts) (Excepted Estates) (Amendment) Regulations 2021 No. 1167 come into force on 1 January 2022 and have effect for deaths occurring on and after that date. HMRC also published a Tax Information and Impact Note and Technical Note providing further information. These changes mean that from 1 January 2022 most non-taxpaying estates will no longer have to complete Inheritance Tax forms for deaths where probate or confirmation is required.

The regulations also update the reporting requirements to clarify the requirement for estates to submit an Inheritance Tax account where the deceased was never domiciled in the UK but owned indirect interests in UK residential property.

For deaths after 31 December 2021, personal representatives will be required to declare that the estate is an excepted estate, if they are claiming transfer of unused nil rate band and provide three estate values for Inheritance Tax purposes on the probate or confirmation application. They will be able to obtain these values if they use the Inheritance Tax Checker tool. Updates to the checker tool will be live at the start of January. We are working closely with the UK courts services to ensure that forms and guidance are updated in line with the changes.

Inheritance Tax and Probate application timelines

Allow 20 days from sending your IHT400 before applying for your grant.

In May 2021, HMRC and HM Courts and Tribunals Service (HMCTS) introduced a new joint process for sharing digital IHT421s directly between departments.

For probate applications in England and Wales, HMRC aim to release the IHT421 to HMCTS within 15 days of receiving the IHT400 or payment of any Inheritance Tax due, whichever is later.

We recommend that you allow 20 days from the date you sent your IHT400 to HMRC before submitting the application for the grant to HMCTS.

If you submit an application for a grant too early HMCTS may not be able to match your application with the IHT421 and this could lead to delays in the grant being issued.

Posting original documents to HMRC

You must not include any original documents such as wills or settlement deeds with your Inheritance Tax account. HMRC do not require original documents.

Payment of Inheritance Tax

We recommend that you pay electronically wherever possible as it is a faster and more secure way of making payment. Do not enclose cheques when submitting your IHT400 as this may cause a delay in the processing of the Inheritance Tax account. Any payment by cheque should be sent separately to the Inheritance Tax account, to the address set out in the Inheritance Tax payments page.