Following a review of the current tax system, the government has announced a number of proposals, including changing the current reporting requirements for estates where there is no inheritance tax (IHT) to pay.
Under the current rules, an IHT return is required for all estates where probate is being applied for. Where estates are classed as "excepted", the executors currently complete form IHT205. Even where there is no IHT to pay, many executors still have to complete a more complex IHT400 account if the estate does not qualify as an "excepted" estate. The proposals suggest that the need to complete an IHT account of either sort will be removed which would be a welcome relief for many executors.
The value of an estate will still need to be carefully and correctly established as this is referred to on the grant of probate. It will be interesting to see how the new procedure will be implemented, and what alternative requirements there may be to verify the figures executors submit with the probate application.
A simplified inheritance tax (IHT) reporting procedure is also being introduced from 1 January 2022, so that more than 90 per cent of non-taxpaying estates will no longer have to complete IHT forms when probate or confirmation is required.