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OTS first report on review of IHT administration

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Following a call for evidence and survey held between April and June this year, the OTS has published its first report and recommendations on administrative issues in relation to IHT. The key recommendation for the longer term is for a fully-integrated digital system, which should include completing and submitting probate applications. A further seven recommendations cover short-term improvements. The OTS intends to publish a second report in Spring 2019, looking at more complex aspects of the tax.

The OTS’s first report on its review of IHT is subtitled Overview of the tax and dealing with administration. The report notes that administrative issues were the most frequently raised concerns in the responses and comments received. The main recommendations made are:

  • the key recommendation, calling for a fully-integrated digital system for IHT, ideally including the ability to complete and submit probate applications;
  • more immediately, changes to current forms for the administration of estates, including a very short form for the simplest estates and updating the conditions for making short forms;
  • a general review of HMRC’s IHT guidance;
  • a system for issuing automated payment receipts and possible refinement of the 12-week review period for enquiries;
  • liaison between HMRC and HM Courts and Tribunals Service on options for streamlining the payment and probate process;
  • review of the requirement for trustees to submit forms when no IHT is due and no reliefs or exemptions are claimed;
  • changes to the existing form for lifetime charges and trusts, including splitting up the form, improving guidance and aligning signature requirements for trustees with other parts of the tax system; and
  • a system of automated receipts for IHT100 forms and payments, and possible introduction of a review period for enquiries.

Comments were received on more complex areas, which the OTS will cover in more detail in its second report. These are discussed in chapter 3 and include:

  • the nil rate band and residence nil rate band;
  • lifetime gifts;
  • businesses and farms; and
  • ‘big picture’ reform.

Other areas which the OTS says it will consider further include:

  • reduced rate of IHT when at least 10% of an estate is left to charity;
  • administration of life insurance products and pensions;
  • trust exit charges and 10-yearly charges; and
  • reservation of benefit rules.


Issue: 1423
Categories: News