The amount of paperwork many beneficiaries have to fill out will reduce from 1 January 2022 under Inheritance Tax reforms.
From this point on, more than 90% of non-taxpaying estates will no longer have to complete Inheritance Tax forms when probate or confirmation is required.
The Treasury estimates this will reduce the amount of paperwork on more than 200,000 estates every year going forward.
In 2018, the Office for Tax Simplification recommended “changes to the current forms to reduce the administration of estates”. It also claimed the current reporting system requires 50% of estates to fill out forms, despite fewer than 5% being liable for the tax.
For those who do need to file inheritance tax returns, all parties involved will no longer have to provide a physical signature. The Treasury said this temporary measure was introduced during the COVID-19 pandemic but has been made permanent.
John Bunker, chair of the private client technical committee at the Chartered Institute of Taxation, said:
“We welcome that many grieving families will be spared the additional stress of supplying unnecessary detail to HMRC.
“The change will mean that only around 15% of estates will need to complete some form of inheritance tax return.
“The challenge for HMRC will be to design a process that meets that aim and is fit for purpose in only nine months.”
Read our guide to Inheritance Tax planning options
Inheritance tax planning can be complicated and, therefore, we have written a guide to help you understand your options and how these can help you mitigate the tax liability on your estate.
To find out more, download our guide.
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If you would like further information on how this change may impact your situation or how we can help you mitigate the Inheritance Tax liability due on your estate, please do not hesitate to contact us by calling 01603 706 820. Alternatively, you can email us at email@example.com.
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The way in which tax charges (or tax relief, as appropriate) are applied depends on individual circumstances and may be subject to future change.
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