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HMRC introduces new reporting requirements on estates

HM Revenue & Customs has issued new forms for use when reporting the estates of deceased persons.

Currently the core form is the IHT200 and it is accompanied by several supplementary forms in relation to specific assets and other items. The new IHT400 and accompanying forms issued on November 17 will replace the IHT 200 form. In its note introducing the changes, HMRC characterises the reform as involving “major changes.”

Standard Life head of estate planning Julie Hutchison says: “The areas where more detailed information is now required reflect a ‘risk’ approach being taken by HMRC, where areas known to, or likely to, involve under-reporting are being targeted. Some of the changes do, however, simply reflect updates, improvements in layout or the way certain areas have evolved.”

According to Hutchison, the more prominent reporting of lifetime gifts featured in the new IHT403 follows HMRC’s announcement in its August IHT and Trusts newsletter that it would be looking more carefully at this area. She says: “It will make executors think more carefully about what they are signing. From a practical perspective, lawyers will be pleased that HMRC has introduced a transition period, so that the new forms can be used now, but the old style forms will still be acceptable until June 9, 2009. This should minimise administration problems.

“Although the changes have simplified some aspects of reporting of estates, this is far from just being an administrative change.”

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