Streamlined Probate Process – 90% of estates exempt from submitting full inheritance tax accounts

This article was written by Clare McLeish, Solicitor at RRL.

If you would like to meet to discuss matters further please contact our team on:

01872 276116 / 01736 339322. 

Following recommendations made by the Office of Tax Simplification back in 2018, changes to the delivery of Inheritance Tax Accounts and the reporting of probate values came into force on 1st January 2022 and apply to deaths on or after this date. It has been estimated that the changes will mean more than 90% of estates will no longer have to complete and submit Inheritance Tax returns to HM Revenue & Customs (HMRC). Instead, the gross and net values can be provided directly to the Probate Registry via the probate application process.

The new rules mean that:

  • Previously where a spouse/civil partner or charity inherited an estate valued at under £1 million, there would be no Inheritance Tax to pay and a simplified Inheritance Tax form could be submitted direct to the Probate Registry without the need to submit a full Inheritance Tax account to HMRC. The new rules now permit this simplified approach for estates which are valued at under £3 million.
  • Where the deceased was a beneficiary of a trust, the value of the trust can be reported via the simplified system provided its value does not exceed £250,000 (increased from £150,000).
  • Lifetime gifts up to a value of £250,000 which are made in the seven years before death can also be reported via the simplified system which is an increase to the previous limit of £150,000.
  • Where the deceased’s spouse or civil partner died before them, the personal representatives can use the simplified system where only part of the transferrable nil-rate is available because, for example, cash legacies where made to friends and family under the Will of spouse or civil partner who died first.

Finally, a single probate fee of £273 for professionals and non-professionals will be introduced from 26th January 2022.

If you would like assistance with any probate related matters, please do not hesitate to contact one of our solicitors at post@rrlcornwall.co.uk.