There were a number of changes that took place at the beginning of 2022 regarding the reporting of Inheritance tax (IHT) to HMRC and also probate fees.

Inheritance Tax Reporting

The Government has updated regulations for deaths occurring on or after 1 January 2022 where the estate of the deceased is classified as low value or exempt, to try and simplify IHT reporting requirements and reduce the administrative burden for families following a bereavement.

Under the old rules, all estates where a grant of probate was required had to complete an inheritance tax return as part of the grant application. This may have been a full inheritance tax return or a summary short-form return where the estate is considered an ‘excepted estate’.

From January HMRC reduced the number of forms that need to be completed and raised current limits, which means more estates will now qualify as excepted estates and there will be no form to file; it will only be necessary to report reduced information in the probate application.

However, to determine which estates qualify it is still recommended that professional advice is sought to ensure that calculations regarding the gross and net value of the deceased estate are accurate.

The regulations also increase the time period after which the person providing the excepted estate information will be discharged from any claim for tax to 60 days rather than the existing 35. This is subject to any HMRC request for additional information within that period, and cases of fraud or failure to disclose material facts.

Probate Fee Increase

The court fee that has to be paid when applying for a Grant of Probate has increased. Previously the court fee to apply for a Grant of Probate was £155 for a professional application and £215 for a personal application. This two-tier probate fee system has been replaced by a flat fee of £273 for anyone applying and the same fee applies to all estates valued at £5,000 more.

This change comes as a result of the Ministry of Justice’s attempts to address the financial deficit within the court service. At present, they report it costs HM Courts & Tribunals Service more to process probate applications than the fees it receives meaning the service operates at a loss and that the fee hike will raise approximately £24m annually.

How we can help
For more information on inheritance or probate please contact Shirah Blackwood (Lower Earley office) on 0118 338 3263 or Victoria Baker (Henley office) on 01491 570900.

Disclaimer: This article provided by THP Solicitors is for general interest only and does not constitute legal advice. Although care is taken to ensure the information is accurate, the material may be incorrect in the circumstances which apply to you, and therefore no responsibility is taken by THP Solicitors for any action you take or refrain from taking in reliance of anything in this article. If you have a legal issue you should seek advice from a legal professional.