Filling out the 10-year anniversary IHT100d form for a trust

mfn123

My father-in-law died a long time ago (November 1995), leaving his estate to my mother-in-law.

Because his IHT NRB was not transferable in those days, she used a Deed of Variation to assign £120k of her inheritance to a new discretionary trust, of which she could be a *potential* beneficiary. The trust was created in November 1996, after which she put the trust inheritance into investment bonds (actually single-premium life policies) so that the trust would gain value, but not be subject to CGT or have any taxable income.

According to HMRC IHTM06124, the trust must report its value at each 10-year anniversary once the value reaches 80% of NRB. We originally thought that meant 2006/16/26, and were worried that the value in 2016 had crept over 80% without us reporting it. However, according to HMRC IHTM42228, the trust is treated as having commenced at the date of death (not trust creation), so the anniversaries actually occur in 2005/15/25, and the 2015 value was under the 80%. Phew...

Moving forward to the present day, we will definitely have to report the value in November 2025, so I'm trying to get my head around the IHT100d forms (and D34 schedules used for investment bonds). The terminology in them is confusing me, so I would welcome any insight from any folk who've already been through this.

First of all, on the IHT100d form, we need to describe the settlor. There is ambiguity here, because the Deed of Variation means deceased FIL is the settlor for IHT purposes (as per IHTM42228), but MIL is the settlor for Income tax. Given that the form is all about IHT, I assume it should be his details, and the trust creation date should be 1995 not 1996?

The fun comes with the D34 schedule for each bond. We need to enter the name of the 'transferor or settlor' and the date of transfer. I assume the dates should be when the bonds were bought (1996), but who is the 'transferor or settlor'?

If we say it is FIL, then he apparently made a transfer over a year after he died! Although he nominally funded the trust in 1995, the bonds were not bought until 1996 by MIL (acting as a trustee), so should we enter her name not his?

The problem seems to be that people are assumed to buy a bond and assign/transfer/settle it to a new trust, whereas in this case I think the trust existed first and the bonds were bought on its behalf.

Can anyone explain how this is all supposed to work?

Thanks for any help/commiserations!

poblomov

The date of transfer is the date of the 10 year anniversary.

I can't think why on some supplementary pages it asks for "name of transferor or settlor", on some for "name of transferor or settlement" on others "name of trust or transferor" and on another "name of settlor/settlement". I would have thought its only purpose is to tie the supplementary pages to the IHT100d if they got separated at HMRC.

Given HMRCs variation in terminology and the fact they ask for details of both on the IHT100d, I think using either your FILs name or the name of the Trust would be fine.

mfn123

poblomov said:

The date of transfer is the date of the 10 year anniversary.

I can't think why on some supplementary pages it asks for "name of transferor or settlor", on some for "name of transferor or settlement" on others "name of trust or transferor" and on another "name of settlor/settlement". I would have thought its only purpose is to tie the supplementary pages to the IHT100d if they got separated at HMRC.

Given HMRCs variation in terminology and the fact they ask for details of both on the IHT100d, I think using either your FILs name or the name of the Trust would be fine.

I agree its confusing. Seems like the forms revamp in 2024 was only half-done. I'll just use the additional notes on the IHT100d to explain it all. Since its still paper-based, it will have to be checked by a human anyway (I hope!)