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Amended IHT excepted estates regulations come into force on 1 April 2014


The Inheritance Tax (Delivery of Accounts) (Excepted Estates) (Amendment) Regulations 2014 (“the Regulations”) were laid before Parliament on 6 March 2014 and come into force on 1 April 2014.

The amendments, which will apply to deaths on or after the 1st April 2014, are designed to ensure that the treatment of liabilities under the Regulations is consistent with provisions introduced by Finance Act 2013.

Under current legislation, a full inheritance tax account (form IHT400) return does not need to be submitted to HMRC in the following circumstances:

1) Where the gross value of the estate (including certain exempt and specified transfers) does not exceed £1,000,000; and

2) Where the net chargeable value of the estate, after deducting liabilities and any applicable exemptions such as the spouse/civil partner exemption and the charity exemption, does not exceed the nil rate band, which is currently £325,000.

Where the above applies, the estate will be deemed to be excepted and there as is no need to submit form IHT400.

The Regulations introduce a formula which ensures that liabilities which are disallowed as a deduction by the Finance Act 2013 will not be included for the purposes of calculating inheritance tax. The result being that that fewer estates will qualify as excepted and more IHT400s will need to be submitted to HMRC.

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