HMRC investigates public attitude to the inheritance tax reporting process

At present, the Inheritance Tax (IHT) process is an almost entirely paper-based process. This involves HMRC’s Trusts & Estates team receiving around 300,000 forms per year.

As part of an ongoing project to move more tax reporting away from paper and toward on-line submission, HMRC has undertaken research into the inheritance tax reporting process (“HMRC Insight & Knowledge Team Research report – Putting Inheritance Tax (IHT) Online – Understanding the customer journey for Inheritance Tax”).

The main finding of the research was that individuals completing the inheritance tax forms regard it as a process that ‘they just had to get through’. In order to deal with the forms, people adopted a variety of coping strategies, including:

  • Treating it as a second job, some set aside specific times every week to complete the process.
  • Compiling checklists of contacts and information to seek to ensure nothing was missed.
  • Printing all the IHT forms and supplementary IHT400 forms and then working through the paper forms, sorting them into ‘done’ and ‘to do’ piles
  • Compiling a file of communications so everything kept together and spending a long time filing the records of the deceased.

HMRC found that all the individuals who were interviewed in the qualitative research took their time filling in the forms and had an overwhelming desire to complete the forms to the best of their ability and get it right first time.

The key frustrations felt by the tax-payers interviewed were:

  • Time taken to source information from third parties
  • Complex terminology used on some of the documents, especially in relation to trusts
  • Lack of contact from HMRC post submission

Over a quarter of participants found the current process complex, with filling in the tax forms being the biggest hurdle.

If you are dealing with the inheritance tax forms, we can assist. Whether you want us to take over all the paperwork on your behalf or just provide legal support as and when you need us, we can help. Contact Philippa Rumary or Derek Peedell on 01993 811 792 or