Inheritance Tax and Trusts newsletter
The August edition of the Inheritance Tax (IHT) and Trusts newsletter is now available on the HMRC website. Key points to note include:
l The new provisions allowing the transfer of unused nil rate band to a surviving spouse became law when the Finance Act received Royal Assent on 21 July. HMRC have issued confirmation that these arrangements are now in force to estates where the new rules had been adopted provisionally.
l HMRC urge agents who are dealing with estates in this category to supply the necessarily supporting details for the claim. They note that “in only 20 per cent of cases submitted by agents are all the requested documents provided. This is in stark contrast to claims made by unrepresented taxpayers who manage [sic] to provide all the documents at the first time of asking.”
l The banking arrangements for IHT are in the process of being transferred to the Shipley Accounts Office. This has been underway for a number of months, with Shipley payslips being issued to taxpayers with a liability to pay. The main impact will be that taxpayers will no longer receive an individual receipt for IHT payments. Instead, they will be able to track payments through statements of account, as for other taxes. The transfer of all IHT banking to Shipley is expected to be complete by the end of 2008, but correspondence is of course unaffected and should still be sent to the relevant tax office.
l A further new development is the new IHT form, designed in consultation with unrepresented taxpayers to make calculations clearer and completion of the return easier. The new form is numbered IHT400, with supplementary pages numbered 401 onwards, and will be in use from the Autumn.
l New versions of forms R185 (Trust Income) and R185 (Estate Income) are also available which take account of the changes to the Trusts supplementary pages to the main return.
l HMRC wish to remind agents that there is no need to apply for an IHT reference for an estate where there is no tax to pay.
l Guidance was provided on the treatment of shares in Northern Rock on certain estates currently being administered – we reported on this guidance back in July.
And finally, HMRC announce that future editions will be published on the “What’s new?” page on the website – there will no longer be an email notification. However, we will provide a summary of the main contents for each newsletter from now on.