On 1 January 2022, changes to Inheritance Tax (IHT) reporting requirements came into force via The Inheritance Tax (Delivery of Accounts) (Excepted Estates) (Amendment) Regulations 2021.
The changes themselves are fairly technical in nature. To go into too much detail here would only cause confusion; but, if you’re interested in the minutiae, the link above is for you.
However, exactly what the changes mean for bereaved individuals and families applying for probate is important to convey.
Applying for probate: a simplification of the process
Something that many individuals and families have often failed to grasp, is the distinction between applying for probate and notifying HMRC of any IHT that is due.
As such, for deaths prior to 1 January 2022 where the estate is deemed excepted and there is no IHT payable, we have typically supplied the Probate Office with two forms; IHT205 (a return of estate information to HMRC) and a PA1 (probate application).
Now, though, the process has been simplified. The stringent rules and monetary thresholds relating to ‘excepted estates’ – estates where no IHT needs to be paid – have been relaxed somewhat and hence many more estates will be deemed to be so.
In addition, the requirement for these estates to complete and submit an IHT205 form has been eliminated, with the form expected to be phased out entirely by the end of the year.
Where once two forms were necessary, there will now only be one; consequently, the administrative burden associated with applying for probate is lightened.
However, detailed work is still required since forms PA1 contain figures showing the value of the estate.
It is important to note that deaths which occurred before 1 January 2022 will require the IHT205 and PA1 combination.
Here to help
When faced with a ‘straight-forward’ estate and a simplified process, you could be tempted to go it alone.
However, the role of an executor is one that carries huge responsibility and oversights can be costly.
Evolving legislation and administrative requirements can make it difficult to be sure of what is required of you and when.
Despite one less piece of paperwork, accurate numbers will still need to be compiled and reported. Seeking professional advice is wise, to ensure nothing is missed.
Appointing GH Probate, to act on your behalf, can make your life that little bit easier at a difficult time. You can read about the advantages of using an accountant for probate, in our handy Probate FAQ guide here.
To speak to one of our discreet, friendly probate practitioners, in Cambridgeshire, Bedfordshire or Hertfordshire, contact us today.
Authored by Director of GH Probate Ltd., Barry Jefferd.
Our Probate service is provided through GH Probate Limited. GH Probate is the trading style of GH Probate Limited. Registered in England and Wales number 9630102. Registered Office: St George’s House, George Street, Huntingdon, Cambridgeshire PE29 3GH.
Authorised to carry out the reserved legal activity of non-contentious probate in England and Wales by the Institute of Chartered Accountants in England & Wales
