Guidance

HMRC Trusts and Estates Newsletter: September 2021

Updated 28 August 2024

Welcome to the September 2021 edition of the HMRC Trusts and Estates Newsletter.

We do not have a mailing list for the newsletter.

Trust Registration Service

The Trust Registration Service is now open for non-taxable trust registrations.

You should now register all UK express trusts and some non-UK express trusts with HMRC. This includes non-taxable trusts, unless the trust is specifically excluded due to its characteristics.

You must register:

• non-taxable trusts in existence on or after 6 October 2020 by 1 September 2022
• non-taxable trusts created after 1 September 2022 within 90 days
• changes to the trust details or circumstances, within 90 days of the change

This gives more time than what is set out in current legislation which will be amended shortly to reflect this.

Find out:

• more detailed information about the trusts that you need to register and the trusts that are excluded
• how to register a trust as a trustee
• how to register a trust as an agent

You can also read detailed technical information in the Trust Registration Service Manual.

The digital live service email address included in the May 2021 newsletter is no longer in use for general enquiries. Contact the trusts helpline or raise a ticket using the appropriate page within the Trust Registration Service.

Inheritance Tax Checker launched

We have updated guidance about valuing the estate of someone who’s died to include an Inheritance Tax checker.

The checker will:

• give the user an estimate of the estate value for Inheritance Tax purposes
• help the user decide what they need to do next based on that estimate

It will not calculate any Inheritance Tax that may be due on the estate or inform HMRC about the estate’s final value.

You will answer questions relating to the assets in the estate, any gifts made in the last 7 years and any debts to the estate. An estimated estate value will be generated from the values you give, along with guidance on what you should do next.

The checker has been created to assist those responsible for estates with little or no Inheritance Tax knowledge and want reassurance about what actions are required.

This guidance will be updated to reflect the Inheritance Tax reporting requirements announcement in the May 2021 newsletter which will come into effect from 1 January 2022.

New telephone number for the Estate Period of Administration Helpline

The new telephone number for the Estate Period of Administration Helpline is 0300 123 1071. Call this helpline for advice on periods of administration where the estate is complex and you need to register the estate. You can also find out more information about returns for someone who has died.

If the estate does not meet the above complex criteria, continue to call the Bereavement Helpline on 0300 200 3000. You can also call the Bereavement Helpline for advice on pre-death tax issues.

The telephone number for help and advice on Inheritance Tax, Probate and Trusts, is unchanged: 0300 123 1072. There are also contact details for:

• Trusts
• Inheritance Tax

Administration period of Deceased’s Estates for Income Tax and Capital Gains Tax

If an estate is not regarded as complex, then this may mean that you do not need to send HMRC a Self Assessment tax return and can instead use the ‘informal payment arrangements’. An estate will not be regarded as complex unless certain conditions are met. A Self Assessment tax return (SA900) will be required for the estate if any of the following apply:

• the total Income Tax and Capital Gains Tax due for the administration period was more than £10,000
• the estate was worth more than £2.5m at the date of death

A Self Assessment tax return (SA900) will be also be required for the estate if the date of death was either:

• before 6 April 2016 and more than £250,000 a year came from the sale of the estate’s assets by administrators or executors
• on or after 6 April 2016 and more than £500,000 a year came from the sale of the estate’s assets by administrators or executors

If the estate does not meet these conditions, then you do not need to send a Self Assessment tax return and can make ‘informal arrangements’.

However, in some situations, an asset may be sold for an unexpected amount at the end of the administration period and the estate becomes a complex estate.

Should this situation occur then a Self Assessment tax return will not be required for the years in which the estate otherwise met the ‘informal’ estates criteria. A Self Assessment tax return will only be needed for the tax year in which the gain is realised on assets valued over £500,000 and the informal arrangements made for the previous years will remain acceptable.

This process will not be applicable for all cases. It should only be used where an element of uncertainty arises and so HMRC will only accept this process in cases where there has been uncertainty over the valuation or there is an unexpected sale or gain.

The information in this article does not affect how you report and pay capital gains tax on the disposal of a residential property.

Example

An estate’s administration period is coming to an end 3 years after a death. The estate was not expected to meet the complex estate conditions and was set to use HMRC’s ‘informal arrangements’ to pay any tax due. However, an asset was then sold for an unexpected amount and the estate now meets the conditions for a Self Assessment tax return to be completed.

In these circumstances, HMRC will accept the use of its ‘informal arrangements’ for the period up to the tax year that the estate became complex, and a full Self Assessment tax return will only be required for the final tax year in which the complex conditions were met.