Implement a fully integrated digital system for filling out IHT forms, including applying for probate
Change current forms to reduce and simplify the administration of estate, including a very short form for the simplest estates. The conditions for completing a short inheritance tax form should be updated
Improve guidance for users, including worked examples and a tax calculator
Look at issuing automated receipts
Review the requirement for trustees to submit forms when no IHT is due and no reliefs or exemptions are claimed
Look at making the customer experience better by reducing and simplifying the current forms, including aligning the signature requirements with other parts of the tax system.
It is yet to be decided by HMRC if any of the recommendations will be introduced. Whilst there is no tax effect of the first report’s recommendations, the anticipated relief from the burden of dealing with inheritance tax forms will be a welcome change for many trustees and executors.
The second report is anticipated to be much more significant in terms of its financial impact and is expected to include recommendations in relation to the following areas:
The nil rate band and residence nil rate band, in particular looking at making the RNRB fairer for those without children or who have not owned their own home.
Lifetime gifts and what can be gifted tax free
Businesses and farms, and in particular looking at what types of assets are treated more favourably as well as looking at simplification of the reliefs
Big picture reform and whether a complete reform of inheritance tax is required
Other areas of complexity and if they can be simplified.
