Inheritance tax administration
The government published a response to the Office of Tax Simplification's (OTS) first inheritance tax (IHT) report and will simplify reporting regulations from 1 January 2022.
This aims to take over 90% of non-taxpaying estates out of the requirement to complete IHT forms. In addition, HMRC will make permanent the current temporary provision that dispenses with the need for physical signatures on IHT returns.
Reporting regulations will also be updated to clarify the requirement for estates to submit an IHT account where the deceased was never domiciled in the UK but owned indirect interests in UK residential property. A letter from the Treasury to HMRC also confirms that the Treasury will continue work on the remaining recommendations: for digitisation, improving guidance and processes for lifetime and trust charges. The government will respond to the recommendations in the second OTS report on more fundamental IHT reform and simplifying its design in due course.
This article first appeared in our Spring 2021 edition of our Private Client & Tax Newsletter.