Trusts and Inheritance Tax

IHT, trusts and estates and coronavirus (COVID-19)

Produced by Tolley
  • 19 Oct 2021 23:09

The following Trusts and Inheritance Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • IHT, trusts and estates and coronavirus (COVID-19)
  • Conditional exemption for heritage property
  • Domicile status for IHT
  • Completing the IHT forms and paying IHT
  • Payments on account for trustees and PRs
  • The execution of Wills

IHT, trusts and estates and coronavirus (COVID-19)

Conditional exemption for heritage property

A deferral of IHT is possible for certain categories of heritage property. See the Heritage property ― conditional exemption and Heritage property ― loss of conditional exemption guidance notes for the basic rules.

HMRC recognises that it may not be possible for owners of properties or assets in the Conditional Exemption Tax Incentive Scheme to meet all their undertakings due to coronavirus (COVID-19) and so has updated its guidance on heritage assets to add information about temporary changes to the Conditional Exemption Tax Incentive Scheme.

The updated guidance includes explanations on how HMRC deals with cases relating to closing or delaying the opening of a national heritage property, conditionally exempted objects on loan to other organisations that close due to Government advice, objects that can only be seen by appointment, and difficulty in advertising, publicity and producing promotional material.

Domicile status for IHT

In the event of a death, an individual who is UK domiciled or deemed domiciled will be subject to IHT on all their worldwide assets, while an individual who is not UK domiciled will be liable to IHT only on assets located in the UK. A significant factor in determining domicile status is UK residence as defined by the statutory residence test. An individual becomes deemed domiciled for IHT purposes after being resident in the UK for at least 15 out of the last 20 tax years preceding the last one.

See the Domicile for UK inheritance tax and Application of the deemed domicile rules guidance notes.

A person’s domicile status could have been changed by an unplanned period of residence in the UK due to the coronavirus lockdown situation, either in the UK or the country to which they would have w

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