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HMRC internal manual

Inheritance Tax Manual

Published guidelines: introduction

HMRC has published guidelines setting out the requirements which an instrument must satisfy to qualify for IHTA84/S142.  They are contained in a letter dated 11 April 1985 sent by Head Office to The Law Society.  The text of the letter is given in the Law Society Gazette of 22 May 1985 at page 1454.  The published requirements are that the instrument must

  • be in writing (IHTM35022) and must be made by the persons or any of the persons who benefit (IHTM35023) or would benefit under the dispositions of the property comprised in the deceased’s estate immediately before his death
  • be made within two years after the death (IHTM35024)
  • clearly indicate the dispositions that are the subject of the instrument, and vary their destination (IHTM35025) as laid down by the deceased’s will or under the law relating to intestate estates, or otherwise

Additionally for instruments effected on or after 1 August 2002

  • the instrument must contain a statement of intent (IHTM35028) if IHTA84/S142 (1) is to apply
  • the instrument must be sent to us within 6 months if it results in additional tax being payable.  It must be accompanied by a calculation of the additional tax due (IHTM35029) and the taxpayers have the option of completing a checklist, form IOV2 (IHTM35029).

For instruments of variation before 1 August 2002 a notice of election (IHTM35027) must have been given within 6 months of the instrument, unless the Board accepted a later election.  That notice should have referred to the appropriate statutory provisions.

You should refer any case where you are asked questions about these guidelines to Technical.