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COVID-19: More changes to IHT processes

1 June 2020: HMRC has further adapted its inheritance tax (IHT) processes to accommodate new ways of working during the coronavirus pandemic. ICAEW’s Tax Faculty outlines the changes.

HMRC has made a series of changes to its IHT process to adapt to the challenges posed by the coronavirus pandemic, and it has published an update on its IHT operations and services levels. The Tax Faculty provides a comprehensive breakdown:

Digital signatures

Until further notice, HMRC will accept IHT400 forms that are not physically signed, from professional agents and unrepresented taxpayers.

HMRC will accept the forms from professional agents if:

  • the names and personal details of the legal personal representatives are shown on the declaration page; and
  • the account has been seen by all the legal personal representatives and they all agree to be bound by the declaration.

The agent must include the following statement: “As the agent acting on their behalf, I confirm that all the people whose names appear on the declaration page of this Inheritance Tax account have seen the Inheritance Tax account and agreed to be bound by the declaration on page 14 of the IHT400.”

HMRC will accept the forms from executors or administrators acting without the help of a professional agent if:

  • the names and personal details of any other executors or administrators are shown on the declaration page; and
  • the account has been seen by all the executors or administrators and they all agree to be bound by the declaration.

Where there is more than one person acting for the estate the following statement must be included: “As a legal personal representative acting for the estate, I confirm that all the people whose names appear on the declaration page of this Inheritance Tax account have seen the Inheritance Tax account and agreed to be bound by the declaration on page 14 of the IHT400.”

Also, until further notice, HMRC will accept IHT100 forms that are not physically signed from unrepresented trustees and from professional agents.

HMRC will accept the forms from trustees acting without the help of a professional agent if:

  • the names and personal details of the other trustees are shown on the declaration page; and
  • the account has been seen by all the trustees and the all agree to be bound by the declaration.

The trustee must include the following statement:

“As trustee acting in this matter, I confirm that all the people whose names appear on the declaration page of this Inheritance Tax Account are the trustees and have both seen the Inheritance Tax Account and agreed to be bound by the declaration on page 8 of the IHT100.”

  • the names and personal details of the trustees are shown on the declaration page; and
  • the account has been seen by all the trustees and they all agree to be bound by the declaration.

The agent must include the following statement:

“As the agent acting on their behalf, I confirm that all the people whose names appear on the declaration page of this Inheritance Tax Account have seen the Inheritance Tax Account and agreed to be bound by the declaration on page 8 of the IHT100.”

Until further notice, HMRC will accept IHT205 forms that are not physically signed from professional agents, if:

  • the names and personal details of the legal personal representatives are shown on the declaration page;
  • the account has been seen by all the legal personal representatives and they all agree to be bound by the declaration; and
  • the agent includes the following statement:

“As the agent acting on their behalf, I confirm that all the people whose names appear on the declaration page of this Inheritance Tax Return have both seen the Inheritance Tax Return and agreed to be bound by the declaration on page 8 of the form IHT205.”

Personal representatives can complete and submit IHT205 forms online.

Electronic submission of IHT400 and IHT100 forms

HMRC is considering options to allow customers to submit forms electronically rather than by post, to help those who cannot access offices to complete paper forms. HMRC is testing technical solutions to confirm the most viable option; one of the possible solutions is Dropbox and HMRC is performing initial user testing. This will be for the submission of IHT400 and IHT100 forms and HMRC hopes to be able to provide a further update shortly.

IHT421 forms

HMRC will no longer print and stamp the IHT421 – inheritance tax probate summary form –and return it to customers. Instead, it will email the form directly to HM Courts and Tribunals Service. HMRC will advise when it has done this by either writing or by adding a note to the calculations.

The process for confirmation in Scotland is different from the probate process in England and Wales. HMRC will continue to return the IHT421 form to customers seeking confirmation so that the requirements set by the Scottish Courts and Tribunals Service can be met.

IHT payments

HMRC is no longer able to accept payments of IHT by cheque. Payments of IHT must now be made by one of the other methods listed at Pay your Inheritance Tax bill.

IHT repayments

HMRC is no longer able to make repayments of overpaid IHT by payable order (cheque) and is writing to customers to get their bank details to allow them to pay the money directly into customers’ bank accounts.

Customers need to send this information in writing to HMRC. HMRC will accept the signature of an agent acting on behalf of the personal representatives or trustees, unless there is a change to the name of the account. In that case, all the individuals who signed the original form IHT400 or form IHT100 must sign the letter. Customers not represented by a solicitor or other agent should ensure that the letter containing this information is signed by all the individuals who signed the original form IHT400 or form IHT100.

The IHT400 and IHT100 forms have been updated to include bank details for repayments of overpaid IHT and the most recent versions of the forms should be used.

Heritage properties and undertakings with regards to conditional exemption

Due to COVID-19 many heritage properties have closed or delayed opening and properties or assets in the Conditional Exemption Tax Incentive Scheme may not meet their necessary undertakings. HMRC has published guidance outlining that HMRC will not consider agreements broken if closures are due to COVID-19 public health measures. This situation will be reviewed regularly.

Operational update and service levels

HMRC provided the following update to the professional bodies in late April.

“For IHT, although there are some necessary changes to accommodate new ways of working, we are continuing to accept paper IHT400 and IHT100 accounts and all IHT and trusts post. 

"In all areas of IHT and trusts we’re currently meeting our published target of clearing 80% within 15 working days. In addition, we are continuing to swiftly clear post that unfortunately falls outside of this timeframe. We are still providing a good level of service on the IHT helpline and on most days since the beginning of March customers have waited less than five minutes for their call to be answered. 

"in light of the impact of COVID-19, we are monitoring demand and resource across all workloads and there may be fluctuations in performance over the coming months. 

"In working with us during this time we ask that your members only call the helpline after they have made every attempt to resolve the issue and need clarification on specific points. Equally that you ask your members not chase responses for anything that is not absolutely urgent. This will help prioritise resources.

"Clearance Confirmation and Confirmation Letters

"In 2018/19 HMRC met our published IHT processing targets, and we continue to do so. HMRC regularly monitor their cases so that the small number that fall outside of target timeframes are swiftly acted upon. This includes for the processing of requests for formal clearance.

"We will not normally issue clearance if less than a year has passed since the date of death and at this time we are considering if we need to prioritise the initial processing of returns, to ensure customers can gain probate quickly, over longer-term services such as the issuing of clearance confirmations.”