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B3A: IHT accounts and returns

Duty to deliver account of property and value

Duty to deliver account of property and value

- Primary duty on persons liable to IHT

 

"(1)     Except as otherwise provided by this section or by regulations under section 256 below, the personal representatives of a deceased person and every person who—

(a)     is liable as transferor for tax on the value transferred by a chargeable transfer, or would be so liable if tax were chargeable on that value, or

(b)     is liable as trustee of a settlement for tax on the value transferred by a transfer of value, or would be so liable if tax were chargeable on that value, or

(bb)     is liable under section 199(1)(b) above for tax on the value transferred by a potentially exempt transfer which proves to be a chargeable transfer, or would be so liable if tax were chargeable on that value, or

(bc)     is liable under section 200(1)(c) above for tax on the value transferred by a chargeable transfer made on death, so far as the tax is attributable to the value of property which, apart from section 102(3) of the Finance Act 1986 would not form part of the deceased's estate, or would be so liable if tax were chargeable on the value transferred on the death, or

(bd)     is liable under section 201(1)(b), (c) or (d) above for tax on the value transferred by a potentially exempt transfer which is made under section 52 above and which proves to be a chargeable transfer, or would be so liable if tax were chargeable on that value, or

(c)     is liable as trustee of a settlement for tax on an occasion on which tax is chargeable under Chapter III of Part III of this Act (apart from section 79), or would be so liable if tax were chargeable on the occasion,

shall deliver to the Board an account specifying to the best of his knowledge and belief all appropriate property and the value of that property." (IHTA 1984, s.216)

- Primary duty on persons liable to IHT

- No grant of representation in UK within 12 months of death: persons interested in the property liable to deliver IHT account

 

"(2)     Where in the case of the estate of a deceased person no grant of representation or confirmation has been obtained in the United Kingdom before the expiration of the period of twelve months from the end of the month in which the death occurred—

(a)     every person in whom any of the property forming part of the estate vests (whether beneficially or otherwise) on or at any time after the deceased's death or who at any such time is beneficially entitled to an interest in possession in any such property, and

(b)     where any of the property is at any such time comprised in a settlement and there is no person beneficially entitled to an interest in possession in that property, every person for whose benefit any of that property (or income from it) is applied at any such time,

shall deliver to the Board an account specifying to the best of his knowledge and belief the appropriate property vested in him, in which he has an interest or which (or income from which) is applicable for his benefit and the value of that property." (IHTA 1984, s.216(2))

- No grant of representation in UK within 12 months of death: persons interested in the property liable to deliver IHT account

Duty discharged if account delivered by another

 

"(5)     Except in the case of an account to be delivered by personal representatives, a person shall not be required to deliver an account under this section with respect to any property if a full and proper account of the property, specifying its value, has already been delivered to the Board by some other person who—

(a)     is or would be liable for the tax attributable to the value of the property, and

(b)     is not or would not be liable with him jointly as trustee;

and a person within subsection (2) above shall not be required to deliver an account under that subsection if he or another person within that subsection has satisfied the Board that an account will in due course be delivered by the personal representatives."  (IHTA 1984, s.216(5))

Duty discharged if account delivered by another

Content of account

Content of account

- Personal representative account must include all property in estate immediately before death or transferred in past 7 years

 

"(3)     Subject to subsections (3A) and (3B) below, where an account is to be delivered by personal representatives (but not where it is to be delivered by a person who is an executor of the deceased only in respect of settled land in England and Wales), the appropriate property is—

(a)     all property which formed part of the deceased's estate immediately before his death, other than property which would not, apart from section 102(3) of the Finance Act 1986, form part of his estate; and

(b)     all property to which was attributable the value transferred by any chargeable transfers made by the deceased within seven years of his death.

(3A)     If the personal representatives, after making the fullest enquiries that are reasonably practicable in the circumstances, are unable to ascertain the exact value of any particular property, their account shall in the first instance be sufficient as regards that property if it contains—

(a)     a statement to that effect;

(b)     a provisional estimate of the value of the property; and

(c)     an undertaking to deliver a further account of it as soon as its value is ascertained.

(3B)     The Board may from time to time give such general or special directions as they think fit for restricting the property to be specified in pursuance of subsection (3) above by any class of personal representatives." (IHTA 1984, s.216(3) - (3B))

- Personal representative account must include all property in estate immediately before death or transferred in past 7 years

- Others must include any property to which tax is or would be attributable

 

"(4)     Where subsection (3) above does not apply the appropriate property is any property to the value of which the tax is or would be attributable."  (IHTA 1984, s.216(4))

- Others must include any property to which tax is or would be attributable

- In form prescribed by HMRC

 

"(1)     All accounts and other documents required for the purposes of this Act shall be in such form and shall contain such particulars as may be prescribed by the Board.

(2)     All accounts to be delivered to the Board under this Act shall be supported by such books, papers and other documents, and verified (whether on oath or otherwise) in such manner, as the Board may require.

(3)     For the purposes of this Act, an account delivered to a probate registry pursuant to arrangements made between the President of the Family Division and the Board or delivered to the Probate and Matrimonial Office in Northern Ireland pursuant to arrangements made between the [Lord Chief Justice of Northern Ireland]1 and the Board shall be treated as an account delivered to the Board." (IHTA 1984, s.257)

- In form prescribed by HMRC

Time limit for account

 

Personal representative: 12 months from death month or 3 months from acting

"(6)     An account under the preceding provisions of this section shall be delivered—

(a)     in the case of an account to be delivered by personal representatives, before the expiration of the period of twelve months from the end of the month in which the death occurs, or, if it expires later, the period of three months beginning with the date on which the personal representatives first act as such;" (IHTA 1984, s.216(6))

 

Persons chargeable in relation to a PET that becomes chargeable: 12 months from death month

"(6)     An account under the preceding provisions of this section shall be delivered—

[...]

(aa)     in the case of an account to be delivered by a person within subsection (1)(bb) or (bd) above, before the expiration of the period of twelve months from the end of the month in which the death of the transferor occurs;" (IHTA 1984, s.216(6))

 

Person in whom GWR property is vested: 12 months from death month

"(6)     An account under the preceding provisions of this section shall be delivered—

[...]

(ab)     in the case of an account to be delivered by a person within subsection (1)(bc) above, before the expiration of the period of twelve months from the end of the month in which the death occurs;" (IHTA 1984, s.216(6))

 

Trustees of settlement: 6 months from month in which chargeable occasion occurred

"(6)     An account under the preceding provisions of this section shall be delivered—

[...]

(ad)     in the case of an account to be delivered by a person within subsection (1)(c) above, before the expiration of the period of six months from the end of the month in which the occasion concerned occurs;" (IHTA 1984, s.216(6))

 

Persons liable due to no grant of representation within 12 months: 3 months from having reason to believe required to deliver account

"(6)     An account under the preceding provisions of this section shall be delivered—

[...]

(b)     in the case of an account to be delivered by a person within subsection (2) above, before the expiration of the period of three months from the time when he first has reason to believe that he is required to deliver an account under that subsection;" (IHTA 1984, s.216(6))

Others: 12 months from end of month in which transfer made or 3 months from becoming liable for tax

"(6)     An account under the preceding provisions of this section shall be delivered—

[...]

(c)     in the case of an account to be delivered by any other person, before the expiration of the period of twelve months from the end of the month in which the transfer is made or, if it expires later, the period of three months beginning with the date on which he first becomes liable for tax." (IHTA 1984, s.216(6))

 

Conditionally exempt transfers and tax on trees/underwood

"(7)     A person liable for tax under section 32, 32A, 79 or 126 above or under Schedule 5 to this Act shall deliver an account under this section before the expiration of the period of six months from the end of the month in which the event by reason of which the tax is chargeable occurs." (IHTA 1984, s.216(7))

Time limit for account

Duty to correct errors in account

 

"If a person who has delivered an account under section 216 above discovers at any time that the account is defective in a material respect by reason of anything contained in or omitted from it he shall, within six months of that time, deliver to the Board a further account containing such information as may be necessary to remedy the defect." (IHTA 1984, s.217)

Duty to correct errors in account

Return by persons concerned in the making of a non-resident trust

 

"(1)     Where any person, in the course of a trade or profession carried on by him, other than the profession of a barrister, has been concerned with the making of a settlement and knows or has reason to believe—

(a)     that the settlor was domiciled in the United Kingdom, and

(b)     that the trustees of the settlement are not or will not be resident in the United Kingdom,

he shall, within three months of the making of the settlement, make a return to the Board stating the names and addresses of the settlor and of the trustees of the settlement.

(2)     A person shall not be required to make a return under this section in relation to—

(a)     any settlement made by will, or

(b)     any other settlement, if such a return in relation to that settlement has already been made by another person or if an account has been delivered in relation to it under section 216 above.

(3)     For the purposes of this section trustees of a settlement shall be regarded as not resident in the United Kingdom unless the general administration of the settlement is ordinarily carried on in the United Kingdom and the trustees or a majority of them (and, where there is more than one class of trustees, a majority of each class) are for the time being resident in the United Kingdom." (IHTA 1984, s.218)

Return by persons concerned in the making of a non-resident trust

Notice of variation of disposition within 6 months

 

"(1)     Where—

(a)     an instrument is made varying any of the dispositions of the property comprised in the estate of a deceased person immediately before his death,

(b)     the instrument contains a statement under subsection (2) of section 142 above, and

(c)     the variation results in additional tax being payable,

the relevant persons (within the meaning of that subsection) shall, within six months after the day on which the instrument is made, deliver a copy of it to the Board and notify them of the amount of the additional tax.

(2)     To the extent that any of the relevant persons comply with the requirements of this section, the others are discharged from the duty to comply with them." (IHTA 1984, s.218A)

Notice of variation of disposition within 6 months
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