Synopsis: From 1 May 2014 minor amendments to form IHT400 will not need to be notified to HMRC Trusts & Estates on separate occasions – instead, in certain circumstances, one form (C4 or C4(S)) can be completed to notify all the changes in one go, which should help reduce the administrative burden for both parties.

Date posted: Wednesday, April 30, 2014

HMRC Trusts & Estates has been looking at ways in which to reduce the burden of being notified about minor amendments to form IHT400. As a result, from 1 May 2014 amendments to the value of an estate can, in certain circumstances, be notified in one go by completing form C4 Corrective Account or C4(S) Corrective Inventory when the personal representatives understand these to be the final amendments which are required. Although, if the estate has not been settled within 18 months of the death, amendments must again be reported as they arise.

However, in the following circumstances, changes will need to be notified as they arise:

i) Where HMRC has written to the personal representatives to inform them that it is starting a compliance check.

ii) Where the deceased’s estate on death includes:

• a qualifying interest in possession in settled property, or

• a gift with reservation of benefit.

iii) Where there is an overall change in the value of the estate of more than £50,000 – before any exemptions or reliefs are deducted.

iv) Where the amendments relate to changes in the value of land or buildings or unlisted shares – including a claim for a loss.

v) Where assets have been sold on which tax is being paid by instalments.

Whether or not to use the new rule will be up to individual practitioners and personal representatives. It offers taxpayers no advantage from a financial point of view as HMRC will still charge interest on any unpaid tax resulting from the amended estate values.

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