Monitoring the excepted estate rules: automatic discharge for trustees
The automatic discharge (IHTM06043) applies to trustees as well as to personal representatives (IHTM05012). But this does mean that trustees need to know when the grant was issued and whether or not we have issued a notice within the prescribed period (IHTM06042) to ask for further information from the personal representatives.
Trustees should contact the personal representatives to find out when the grant was issued and whether we have requested further information.
If we have not requested an account within the prescribed period, the trustees are discharged from any claim to tax.
The automatic discharge operates in the same way as formal clearance (IHTM40010). In other words, once the prescribed period has passed, the trustees are entitled to rely on that clearance should, for example, an additional asset come to light in the Free Estate, which then gives rise to a tax liability. You should refer any case where this occurs to Compliance.
Where an excepted estates grant has been obtained and we have asked for or been given an account from the personal representatives for the free estate, the automatic clearance does not apply. But as the trustees for the settled property have not delivered an account, you should not normally issue a clearance letter to them. But, where we have been given an account for the free estate and we have issued a clearance letter you may also write to the trustees of the settled property, either
- confirming the estate remains an excepted estate, or
- giving clearance,
if the trustees request this.
If we have established that the estate does not qualify as an excepted estate, the case will be handled in Compliance.