Personal and trust taxation including CGT and IHT
CGT Holdover relief – digital signature allowed
HMRC’s self-assessment helpsheet HS295 has been updated. The update includes the following confirmation under the heading ‘How to claim Hold-over Relief’
Due to measures put in place to stop the spread of coronavirus (COVID-19), the form can be completed using a digital signature rather than being physically signed by both transferor and transferee, until further notice.
HMRC issues further guidance in relation to the residence of individuals due to the COVID-19 pandemic
HMRC updated the Residence, Domicile and Remittance Basis Manual with a Q&A concerning international tax and coronavirus (COVID-19) at Annex D.
Note: Finance Act 2020 modified the statutory residence test in connection with COVID-19. It provides relaxations to the various tests where days were spent in the UK within the period 1 March 2020 to 1 June 2020 inclusive on certain activities related to the detection, treatment or prevention of coronavirus disease.
Trust and Estates Newsletter
The June 2020 HMRC Trusts and Estates Newsletter was published on 12 June 2020 and contains a number of useful COVID-19 related updates including:
- Confirmation that the deferral of July 2020 payments on account will also apply to trusts.
- Details of a new, temporary email contact option for times when the Trusts and Estates helpline is busy.
- A new process for IHT421s which HMRC will be emailing direct to HM Courts and Tribunal Service.
- A new service allowing electronic submission of IHT400s and IHT100s via Dropbox.
HMRC is holding regular meetings with representative bodies, including the CIOT, regarding IHT systems and processes during the COVID-19 pandemic. If you have any queries or concerns about the impact of COVID-19 on IHT and trust matters, please let us know on email@example.com so we can feed back to HMRC.
HMRC Trusts and Estates Agents Advisory Group and Capital Taxes Liaison Group IHT Forum 28 May 2020
HMRC’s Note of the conference call attended by CIOT representatives to address current operational issues for HMRC Trusts and Estates and Inheritance Tax can be found here.
The note includes a technical explanation of the security aspects of the Dropbox system.
Capital taxation and tax-exempt heritage assets
HMRC has published guidance highlighting temporary changes to Inheritance Tax exemptions and reliefs policy, and Capital Gains Tax reliefs policy, for national heritage property, due to coronavirus (COVID-19).
IHT Time limits
The Financial Secretary to the Treasury delivered a Written Answer on 18 May 2020 Probate Q&A:
Question by Olivia Blake MP: To ask the Chancellor of the Exchequer, what assessment he has made of the potential merits of extending probate for people who have experienced bereavement during the covid-19 lockdown and who therefore cannot meet the six month deadline for inheritance tax submission.
Answer by Jesse Norman MP: While there is no statutory deadline for making probate applications, the Government is aware of concerns about the six-month deadline for paying inheritance tax and the twelve-month deadline for filing a return. Where a taxpayer is unable to file their return on time because of COVID-19, HMRC will consider that within the scope of a reasonable excuse and as grounds for appeal against late filing penalties. The Government continues to explore all avenues to help those affected.
HMRC have confirmed that personal representatives will have to demonstrate how, in their specific circumstances, Covid-19 related issues amount to a reasonable excuse for their delay in filing an IHT return after the statutory limit (12 months after the end of the month of death). The 6-month limit for payment of IHT is unaffected. If personal representatives are unable to file an account at the 6 month point, they should estimate the IHT due and make a payment on account to prevent interest accruing.
HMRC Trusts and Estates Agents Advisory Group and Capital Taxes Liaison Group IHT Forum 23 April 2020
HMRC’s Note of the conference call attended by aCIOT representatives to address current operational issues for HMRC Trusts and Estates and Inheritance Tax can be found here.
IHT Operational Issues – Update 12 May 2020
On 12 May HMRC IHT informed us that they will no longer print and stamp the IHT421 (inheritance tax probate summary form) and return it to customers. Instead, they will email the IHT421 directly to the HM Courts and Tribunals Service. They will let the agent or taxpayer know when they have done this either by writing, or by adding a note to the IHT calculation.
On Friday 1 May 2020 HMRC also launched a new webchat service to get help to complete the form IHT400 and schedules, and to answer other inheritance tax questions.
Further to our earlier news item on 9 April 2020 (below) setting out that HMRC will no longer be accepting cheque payments for IHT, or making IHT repayments by cheque, HMRC have started to update various IHT forms to include space to add bank details. To date, the provision to add bank details have been added to the IHT35 and IHT100. Members should make sure that they are using the latest versions of all forms.
IHT Operational Issues – Update 9 April 2020
On 9 April 2020, HMRC supplied the following update about the impact of COVID-19 on the payment of IHT and how to get IHT forms signed under current circumstances.
“The Coronavirus (COVID-19) situation continues to change. Because of this, we are introducing new ways of working. As part of this we will be making the following changes:
Paying us by cheque
We will no longer accept payment by cheque. Payment of Inheritance Tax must now be made by one of the other methods of payment listed at https://www.gov.uk/paying-inheritance-tax. We recommend you pay by Faster Payments (online or telephone banking), CHAPS or Bacs to HM Revenue and Customs’ (HMRC) account.
Making repayments to you
We will no longer make repayments using payable orders/cheques. Instead, we will make payments directly to a customer’s bank account using Faster Payments.
To deal with your repayment, we will need some more information from you.
For each of the bank accounts you want us to use to make the repayment, you will need to tell us the:
- bank account number
- sort code
- name of the account holder
You should send this information in writing to:
HM Revenue and Customs
You should write the words ‘Repayment - further details’ at the top of your letter.
As an agent acting on behalf of the estate, we will accept your signature on behalf of the personal representatives or trustees, unless you wish to change the name of the account you want it paid to. In that case, all the people who originally signed the form IHT400 or form IHT100 must sign the letter.
For customers applying without the help of solicitor or other agent, the letter containing this information must be signed by all the people who originally signed the form IHT400 or form IHT100.
Please note that we will not be able to issue the repayment unless we have all the information we need and the necessary authorisation. Using Faster Payments is safer and quicker than payable orders. Once we have dealt with your repayment, you should receive it the following day.
Signing forms IHT400 and IHT100
We recognise that the need for all Legal Personal Representatives (‘LPRs’) or trustees to physically sign the form IHT400 and IHT100 - ‘Inheritance Tax Account’ makes submitting these forms difficult whilst the current measures for self-isolation and social distancing are in place.
For this reason, we have agreed a new, temporary process.
Until further notice, HMRC will accept printed signatures on IHT400 and IHT100 forms in the following circumstances.
There is a professional agent acting, and both:
- The names and other personal details of the LPRs or trustees are shown on the declaration page.
- The account includes a clear and unambiguous statement from the agent to confirm that all the LPRs or trustees have seen the account and have agreed to be bound by the declaration.
The suggested wording for this statement is:
‘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 both:
- seen the Inheritance Tax Account
- agreed to be bound by the declaration on (page 14 of the IHT400) or (page 8 of the IHT100).’
GOV.UK will be updated to reflect all of these changes in the coming days.
We may need to make more changes to our processes as the situation with COVID-19 develops. If this happens, we will tell you.”