As Probate Practitioners we have been met with more changes to the Probate process in the last couple years as we have for… well as long as I have known!
We have moved from requirements to complete an Oath, to a Statement of Truth, to a PA1P/A form and now to an online application process (with an occasional PA1P/A mixed in there).
The outcome of these rolling adjustments is to have a more forward thinking and digitalised application process that is better fit for purpose.
I think it is getting there to achieving a more simplified process although admittedly there have been some teething issues and of course the circumstances of the last 2 years or so which have caused lengthy delays in Grants of Representation being issued.
The probate process has always historically been hard copy based: paper forms, wet signatures and letters in the post. However, the digitalisation process has aimed to move away from this and be more streamlined for lay applicants and practitioners with HMRC and the Probate Registry accepting forms without wet signatures, uploaded documents and in the coming years I imagine even more processes will be brought further online whilst still providing the necessary safeguards.
January 2022 is bringing a raft of further changes our way directly from HMRC. These are in relation to recommendations by the Office of Tax Simplification to reduce the administrative burden for Estates where there is no Inheritance Tax payable. There is a lot for practitioners and lay applicants to get to grips with, but I believe these will ultimately be welcome changes for all.
The first change it actually quite surprising. This is to remove the need to file the short form IHT form ‘Return of Estate Form’ known as an IHT205. This form has been around in a number of guises for many years and is, in a nutshell, an inventory of an Estate where the Estate is ‘excepted’ which means it is non-taxable or else has no complicating factors. There is no longer a requirement to complete or file this form with the Probate Registry.
In a way, there is still a requirement to compile the information that was previously submitted on the IHT205 to be able to generate the gross and net figures for inheritance tax and for the Grant of Representation but there is no longer a requirement for an IHT205 form to be completed, signed and submitted.
The circumstances in which a full inheritance tax account known as an ‘IHT400’ is required have also been reduced which means less Estates will need to complete a full inheritance tax account; this will see a huge administrative burden lightened as on average even a straightforward IHT400 form can be running on for 40 pages! In particular, previously the submission of an IHT400 would be required if an Estate was over £1 million even if there was no tax to pay due to inheritance tax exemptions: this has now been pushed up to £3 million. This will certainly cut the administration process where the beneficiary is a spouse/civil partner or a registered charity. Previously an IHT400 was required if there was a need to just use an unused percentage of a transferable nil rate band (a portion of a predeceased spouse’s/civil partner’s nil rate band) this has now been changed so an IHT400 is no longer required to cater for this scenario.
The bottom line is of course there is no change to the Inheritance Tax position financially, but the changes will hopefully ease the reporting requirements on many Estates.
There are also a number of more technical changes to HMRC’s requirements being brought in and also an increase in the Probate Court Fee from 26th January 2022 (which is a flat fee of £273.00 and not the controversial banded rate which was floated a few years ago)
Despite these ‘simplifications’ to HMRC reporting, Estate administration can be a complicated and time-consuming business and we would certainly recommend getting professional advice to help guide your through the process.
If we can help you in any way or you have any queries, then please do not hesitate to contact Jacksons’ Private Client Team on 01642 356500/0191 2322574.
Helen Milburn, Associate Solicitor, Private Client Team, Jacksons Law Firm
