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How to Report Inheritance Tax Due on a Gift or Trust
When you make a lifetime gift into trust or there's a chargeable event affecting trust property, you may need to tell HMRC and pay Inheritance Tax before anyone dies. The IHT100 is actually a suite of different forms, each designed for a specific type of chargeable event — such as making a gift...
When you make a lifetime gift into trust or there's a chargeable event affecting trust property, you may need to tell HMRC and pay Inheritance Tax before anyone dies. The IHT100 is actually a suite of different forms, each designed for a specific type of chargeable event — such as making a gift into trust, the 10-year anniversary of a trust, or assets leaving a trust. Knowing which form to use and when to submit it is essential to staying compliant.
What is the IHT100?
The IHT100 is the collection of forms used to report specific occasions when Inheritance Tax becomes due on a trust or lifetime transfer. These occasions are known as chargeable events. Unlike Inheritance Tax on death, which is reported when someone passes away, these forms deal with tax due during someone's lifetime.
Each form in the IHT100 suite covers a different type of chargeable event. You should only complete the form that matches the specific event you need to report.
Before you begin, check whether you need to register the trust with HMRC's Trust Registration Service.
Which IHT100 form do you need?
IHT100a – Gifts or transfers into trust
Use form IHT100a when you make a gift or other transfer of value into a trust and Inheritance Tax is payable immediately. This applies to chargeable lifetime transfers where tax cannot wait until death to be assessed.
IHT100b – End of a qualifying interest in possession (lifetime)
Use form IHT100b to report when a beneficiary's interest in possession in a trust has ended during their lifetime. An interest in possession means the beneficiary has the right to receive income from the trust, or to use trust property.
Do not use this form if the interest ended because the person died.
IHT100b (death) – End of interest in possession on death
If you are a trustee and a qualifying interest in possession has ended because someone has died, use form IHT100b (death). Do not use this form if the deceased's estate qualifies as an 'excepted estate' (a smaller estate that does not require a full Inheritance Tax account).
If you are an executor, or an executor who is also a trustee, use form IHT418 instead.
IHT100c – Exit charge
Form IHT100c is used to report an exit charge. This occurs when assets in a trust cease to be 'relevant property' — meaning they leave the type of trust where Inheritance Tax applies on an ongoing basis, such as a discretionary trust.
IHT100d – 10-year anniversary charge
Relevant property trusts (such as discretionary trusts) face a periodic charge every 10 years. Use form IHT100d to report the value of relevant property held in the trust immediately before each 10-year anniversary. This is known as the principal charge.
IHT100e – Charges on special trusts
Use form IHT100e when assets leave a 'special trust' — a category that includes certain trusts for disabled people and bereaved minors.
IHT100f – End of conditional exemption
Form IHT100f is for reporting events that affect assets with conditional exemption from Inheritance Tax or Capital Gains Tax, or an exemption from the old Estate Duty. These exemptions apply to certain heritage assets, such as historic buildings or important works of art, provided conditions are met.
Do not use this form if the event triggers a deferred Capital Gains Tax charge.
IHT100h – Assets leaving an 18 to 25 trust
An 18 to 25 trust is a specific type of trust set up when one parent has died, where the beneficiary becomes entitled to the assets between the ages of 18 and 25. Use form IHT100h to report when assets stop being held in this type of trust.
When you don't need to complete an IHT100 form
Not all transfers trigger Inheritance Tax. You do not need to complete an IHT100 form for exempt transfers, such as:
- Assets transferred between spouses or civil partners
- Gifts to registered UK charities
HMRC publishes a full list of Inheritance Tax exemptions in their manuals.
Record keeping
You must keep all documents used to complete the IHT100 forms and any supplementary pages, as HMRC may request them later. You do not need to send copies of documents with your form unless HMRC specifically asks for them.
What happens after you submit
HMRC will write to confirm they have received your form and give you a date by which you can expect to hear from them if they have questions. If you hear nothing after that date, HMRC has no further queries.
Compliance checks
Within 12 weeks, HMRC will let you know if your form has been selected for a compliance check. If selected, they will contact you by phone to explain what they are checking and agree a deadline for any additional information.
HMRC may ask the Valuation Office Agency or Shares and Assets Valuation to review asset valuations. If they agree a higher value, HMRC will send you new calculations.
Paying your Inheritance Tax bill
You must pay any Inheritance Tax due within 6 months of the chargeable event.
To make a payment, you need an Inheritance Tax payment reference number. Complete form IHT122 to obtain this reference at least 3 weeks before you intend to pay.
Other taxes on trusts
Capital Gains Tax and Income Tax may also apply to trust assets and income. Check whether you need to:
- Include trust income or gains on a Self Assessment tax return
- Report gains to HMRC separately
Getting help
If you need help calculating the tax or completing the forms, contact HMRC's Inheritance Tax helpline. Older versions of IHT100 forms are available on the National Archives website if you need to reference past submissions.
Sources
This article provides general guidance based on current HMRC rules. For advice specific to your situation, speak to your accountant.