Filling in IHT403 Form

[Raheen]

I am working on completing form IHT403 for the estate of a relative.
The deceased person had a very good pension, modest outgoings & a pattern of a large number of donations
to charities. The charity donations would mostly be made by monthly direct debits from a bank current account.

All of the above suggests that it should be possible to demonstrate that these gifts were exempt of tax under the
"normal expenditure rules". I have filled in the table on page 8 (item 20), using data from bank statements and it looks OK, in
that the annual surplus of income over expenditure easily exceeds the donations in every year.

However, earlier on the form on pages 3&4 (item 7), it says that I must list these donations. Given that they were made in monthly DDs, these payments run to just over 500 discrete items over the relevant 7 years, an average of over 70 per year!

How do I list them?
Would HMRC accept a supplementary listing by year in the form of 7 sets of sheets, submitted with the IHT403?

[Lootman]

Surely gifts to charity are exempt from IHT by virtue of them being gifts to charity. So why mention them at all?

The "regular gifts from normal income" exemption is for gifts made to individuals.

[helfordpirate]

Gifts to charity on death or lifetime transfers are exempt transfers - they are not PETs. So there is no need to account for them.
See https://www.gov.uk/hmrc-internal-manual ... /ihtm11101

[Raheen]

The preamble to the box at item 7 page 3 says "Charities" and one of the columns requests the charity's HMRC Reference Number.

I agree that they are exempt but why did they request this listing?

[PinkDalek]

Note the content in helfordpirate's link. Not all charities qualify.

The preamble to the box at item 7 page 3 says "Charities" and one of the columns requests the charity's HMRC Reference Number.

I agree that they are exempt but why did they request this listing?

A link to where you are reading is always helpful https://assets.publishing.service.gov.u ... _10_18.pdf

Box 7 on page 3 If you answered ‘Yes’ to any of the questions on page 1 (page 1 is entitled Gifts made within the 7 years before death) is unrelated to Gifts made as part of normal expenditure out of income on page 8. That page 8 has the narrative Only fill in this page if you’ve ticked ‘Yes’ to box 6 on page 1.

[PinkDalek]

I missed this part in your OP:

However, earlier on the form on pages 3&4 (item 7), it says that I must list these donations. Given that they were made in monthly DDs, these payments run to just over 500 discrete items over the relevant 7 years, an average of over 70 per year!

How do I list them?
Would HMRC accept a supplementary listing by year in the form of 7 sets of sheets, submitted with the IHT403?

An IHT403 (finalised by solicitors) in front of me states "Please see attached schedule" in a number of places and those separate schedules were accepted (although there were nowhere near 500 items listed). I might consider speaking to HMRC Trusts and Estates to establish what level of detail they require. For example, they might be prepared for you to summarise the donations per charity in total over the 7 years, if that is simpler for you. Maybe even approximately depending on the sums involved.

[Lootman]

The preamble to the box at item 7 page 3 says "Charities" and one of the columns requests the charity's HMRC Reference Number.

I agree that they are exempt but why did they request this listing?

Clearly reporting those items is redundant since they are not taxable items in any event.

My guess would be that HMRC are trying to nudge executors and administrators to double check that the gift recipients are truly registered charities rather than other types of non-profits that do not enjoy a special tax-free status.

Assuming that you are certain that all the recipients in this case are genuine tax-exempt charities than I would quite simply ignore the items. There is probably at least a 99% probability that HMRC will just rubber stamp the forms anyway. And, in the rare event that they do investigate, then you have all the detailed information that will satisfy them that no tax is due.

[scrumpyjack]

Presumably you can ignore any where the amount for a specific charity was under £250 per annum.

[DrBunsenHoneydew]

A one-line entry for each charity is quite sufficient.
Just put in the boxes
2012-2018 Lady Snootingham's Hospice for Genteel Folk, Charity Reg No 123456 Monthly cash donations total £1234 in last 7 years. Charity donation; £0 net value

[yorkshirelad1]

I am working on completing form IHT403 for the estate of a relative.

How do I list them?
Would HMRC accept a supplementary listing by year in the form of 7 sets of sheets, submitted with the IHT403?

I've seen situations on HMRC forms where the solicitor has put: "please see separate sheet appended" where there are lots of figures for one small box and the solr has just appended my printed spreadsheet of the relevant figures (it was on a Lichtenstein Disclosure Facility form for my sister where I'd compiled all the figures for a particular section in a spreadsheet, and the solr and I agreed that it wasn't worth transcribing them all onto the form).

I also get the sense that as long as the regular income/expenditure figures look "about right" they're not going to challenge them too much, although I have heard some horror stories where they've required n years of historic bank statements to back up the figures. Also, I understand that there is a view within HMRC e.g. on a tax enquiry, for every HRMC employee hour worked on the enquiry, they should expect it to raise £n in tax revenue from the taxpayer.

IANAL and those are just my experiences (wholly not empirical) gleaned over time.