IHT100b required on termination of QIIP during Life Tenant's lifetime?

Trusts Discussion
1

We have ceased a QIIP, appointing all the funds to the Life Tenant absolutely. Does this have to reported to HMRC by completion of an IHT100b?

My gut tells me no reporting is required, on the basis the assets will still be assessed to Inheritance Tax in the Life Tenant’s Estate, but I am struggling to find any evidence to support this.

2

Yes. Box C8 requires you to state where the assets have gone. This will highlight to HMRC that there is no charge. The guidance on the forms does not say no form is need if no charge. It is not a case of an exemption to which the guidance links https://www.gov.uk/guidance/tell-hmrc-that-inheritance-tax-is-due-on-a-gift-or-trust-iht100#when-you-do-not-need-to-complete-an-iht100-form Forms have a policing role as well as notification of an actual tax charge.

Jack Harper

Jack Harper

3

Hi Jack

Thank you for your comments.

After coming across a similar scenario recently, I have looked into this again and, just in case you were not already aware, I think there are reporting thresholds that apply here. This is as per SI 2008/605 INHERITANCE TAX (DELIVERY OF ACCOUNTS) (EXCEPTED TRANSFERS AND EXCEPTED TERMINATIONS) REGULATIONS 2008.