The Inheritance Tax (Delivery of Accounts) (Excepted Estates) (Amendment) Regulations 2011

• Citation: S.I. 2011/214
• Sections: 6

Section 1 Citation, commencement, effect and interpretation

(1) These Regulations may be cited as the Inheritance Tax (Delivery of Accounts) (Excepted Estates) (Amendment) Regulations 2011.

(2) These Regulations shall come into force on 1st March 2011 and, subject to paragraph (3), shall have effect in relation to deaths occurring on or after that day.

(3) Regulations 2, 4, 5 and 6 shall have effect in relation to deaths occurring on or after 6th April 2010.

(4) In these Regulations “the principal Regulations ” means the Inheritance Tax (Delivery of Accounts) (Excepted Estates) Regulations 2004 .

Section 2 Amendment of the principal Regulations

In regulation 2 (interpretation) of the principal Regulations for the definition of “IHT threshold” substitute ““IHT threshold” has the meaning given in regulation 5A;”.

Section 3 Amendment of the principal Regulations

(1) Regulation 4 (excepted estates) of the principal Regulations is amended as follows.

(2) At the beginning of paragraph (2)(d) insert “subject to paragraph (7A),”.

(3) In paragraph (3)—

(a) At the beginning of sub-paragraph (d) insert “subject to paragraph (7A),”,

(b) At the end of sub-paragraph (e) omit “and”, and

(c) After sub-paragraph (e) insert—

(ea) the total value transferred on that person’s death by a spouse, civil partner or charity transfer is greater than nil; and

(4) In paragraph (6) after ““specified transfers” means” insert “, subject to paragraph (7A),”.

(5) After paragraph (7) insert—

(7A) For the purpose of paragraphs (2)(d) and (e), (3)(d) and (e) and (6) any transfers of value made by that person in any period from 6th April in any year until and including the following 5th April which—

(i) are exempt transfers by virtue of section 21 (normal expenditure out of income) of the 1984 Act ,

(ii) are made less than seven years prior to the death of that person, and

(iii) are in total more than £3,000,

shall be treated as chargeable transfers.

Section 4 Amendment of the principal Regulations

After regulation 5 (spouse, civil partner and charity transfers) of the principal Regulations insert—

IHT threshold

(5A)

(1) Subject to paragraph (2), for the purposes of these Regulations “IHT threshold” means the amount shown in the second column in the first row of the Table in Schedule 1 to the 1984 Act (upper limit of portion of value charged at rate of nil per cent) and in the first column in the second row of that Table (lower limit of portion charged at next rate) applicable to—

(a) chargeable transfers made in the year before that in which a person’s death occurred if—

(i) that person died on or after 6th April and before 6th August, and

(ii) an application for a grant of representation or, in Scotland, an application for confirmation, is made before 6th August in that year; or

(b) chargeable transfers made in the year in which a person’s death occurred in any other case,

and for this purpose “year” means a period of twelve months ending with 5th April.

(2) Where the criteria specified in paragraphs (3) and (4) are met “IHT threshold” means the IHT threshold as defined in paragraph (1) as increased by 100 per cent.

(3) The criteria specified in this paragraph are as follows—

(a) immediately before the death of a person (referred to for the purposes of this paragraph and paragraphs (4), (5) and (6), as a “first deceased person”) that first deceased person was the spouse or civil partner of the person specified in regulation 4(2) or (3) (referred to for the purposes of this paragraph as “the survivor”);

(b) the survivor survived the first deceased person;

(c) either—

(i) in a case where the first deceased person was the spouse of the survivor, the first deceased person died on or after 13th November 1974, or

(ii) in a case where the first deceased person was the civil partner of the survivor, the first deceased person died on or after 5th December 2005; and

(d) a claim is made pursuant to section 8A of the 1984 Act—

(i) by virtue of which the nil-rate band maximum at the time of the survivor’s death is treated, for the purpose of the charge to tax on the death of the survivor, as increased by 100 per cent, and

(ii) which is made in respect of not more than one first deceased person.

(4) The criteria specified in this paragraph are as follows—

(a) the first deceased person died domiciled in the United Kingdom;

(b) the value of the first deceased person’s estate is attributable wholly to property passing—

(i) under the first deceased person’s will or intestacy, or

(ii) by survivorship in a beneficial joint tenancy or, in Scotland, by survivorship in a special destination;

(c) of that property, not more than £100,000 represented value attributable to property which immediately before the first deceased person’s death was situated outside the United Kingdom;

(d) the first deceased person was not a person by reason of whose death one of the alternatively secured pension fund provisions applies;

(e) the first deceased person died without having made any chargeable transfers during the period of seven years ending with the first deceased person’s death; and

(f) the value transferred by any chargeable transfer made on the death of the first deceased person was not reduced by virtue of section 104 (business property relief) or section 116 (agricultural property relief) of the 1984 Act.

(5) For the purpose of paragraph 4(e), sections 104 (business property relief) and 116 (agricultural property relief) of the 1984 Act shall not apply in determining whether the first deceased person has made a chargeable transfer.

(6) Subject to paragraph (7), for the purpose of paragraph (4)(e) any transfers of value made by the first deceased person in any period from 6th April in any year until and including the following 5th April which—

(i) are exempt transfers by virtue of section 21 (normal expenditure out of income) of the 1984 Act,

(ii) are made less than seven years prior to the death of that person, and

(iii) are in total more than £3,000,

shall be treated as chargeable transfers.

(7) Paragraph (6) shall have effect in relation to deaths occurring on or after 1st March 2011.

Section 5 Amendment of the principal Regulations

(1) Regulation 6 (production of information) of the principal Regulations is amended as follows.

(2) For paragraph (1) substitute—

(1) Subject to paragraph (3), a person who by virtue of these Regulations is not required to deliver to the Board an account under section 216 of the 1984 Act of the property comprised in an excepted estate, must produce the information specified in paragraph (2) and, where the criteria specified in regulation 5A(3) and (4) are met, paragraph (2A), to the Board in such form as the Board may prescribe.

(3) After paragraph (2) insert—

(2A) The information specified for the purpose of paragraph (1) is—

(a) the full name of the first deceased person,

(b) the last known address of the first deceased person,

(c) the date of death of the first deceased person,

(d) the date and place of the marriage or civil partnership (as the case may be) between the first deceased person and the survivor, and

(e) either—

(i) a statement specifying whether a grant of probate, grant of letters of administration or grant of confirmation was issued in relation to the estate of the first deceased person and the date and place of issue of such grant, or

(ii) a statement specifying that no grant of probate, grant of letters of administration or grant of confirmation was issued in relation to the estate of the first deceased person.

(2B) In paragraph (2A) “first deceased person” and “survivor” shall have the meaning given to them in regulation 5A(3)(a).

(4) In paragraph (3)—

(a) for “if the information” substitute “to the extent that the information”, and

(b) after “in paragraph (2)” insert “and, where applicable, paragraph (2A)”.

Section 6 Amendment of the principal Regulations

In regulation 7(1) (production of information) of the principal Regulations after “regulation 6(2)” insert “and (2A)”.