a. The asset transferred is cash or quoted shares or securities, AND
b. The value transferred by the chargeable transfer, together with the values transferred by any previous chargeable transfers made by the transferor during the seven years preceding the transfer, does not exceed the IHT threshold*.

This means that CLTs of cash, quoted shares or securities will not be required to be reported where all CLTs made by the client in the previous seven years (including the CLT now being made) do not exceed the value of the individual’s available nil-rate band. In principle this means that reports in these circumstances will only be required where IHT is due.

a. The value transferred by the chargeable transfer, together with the values transferred by any previous chargeable transfers made by the transferor during the seven years preceding the transfer, does not exceed 80% of the IHT threshold, AND
b. The value transferred by the transfer of value giving rise to the chargeable transfer does not exceed the net IHT threshold.

The net IHT threshold means the IHT threshold (currently £325,000 for 2010/11) less the summed values of all previous chargeable transfers made during the seven years preceding the current chargeable transfer (not including the CLT now being made). For the purposes of Test 2b above, business property relief and agricultural property relief will not apply in determining the value of the chargeable transfer. The 80% limit in Test 2a means the reporting level in 2010/11 is £260,000.

For example, for a CLT not to be reportable it must pass two tests; firstly that the cumulative total (current CLT £100,000 plus previous CLTs £125,000 = £225,000) does not exceed 80% of the current NRB (£260,000), and secondly that the current CLT (say £100,000) does not exceed the net IHT threshold (NRB £325,000 less previous CLTs £125,000 = £200,000).

So in this case, both tests have been met so reporting is not required.

All Skandia trusts affected by the changes are considered to fall under test 2.

Please see ‘Inheritance (IHT) - reporting thresholds’ for full explanation of the new thresholds.

• If there are two Settlors (a Joint Settlor trust) then separate forms will need to be completed.
• IHT100 form needs to be submitted to HMRC within 12 months from the end of the month in which the transfer was made.

For Discounted Gift Trust (Discretionary version) the value of the CLT will be the value detailed in your client’s post sale Discounted Gift Trust letter ‘Discounted Value of Gift’; for Joint Settlor cases the CLT value will be that which relates to each Settlor, this is unlikely to be a 50:50 split.

For Discounted Gift Trust (Discretionary version) you will also need to provide a copy of the policy schedule and the Discounted Gift Scheme letter confirming the discount post underwriting.

All boxes on the IHT100 form and any supplementary pages that apply need to be completed. The figure ‘0’ should be written in the box if the assets described were not part of the transfer.

Section A  About the Chargeable Event
A1            Tick box A1.
A2-A6       Leave blank and move to Section B.

Section B  About the transferor/settlement
B1            Complete the title of the Settlor ie Mr, Mrs, Miss etc.
B2            Complete the surname of the Settlor.
B3            Complete the forename(s) of the Settlor.
B4            Complete the address of the Settlor.
B5            Complete the date of birth of the Settlor.
B6-B7       Complete with N/A.
B8            Complete the Settlor’s tax district.
B9            Complete the Settlor’s income tax or self-assessment reference, if known. Otherwise leave blank.
B10          Complete the Settlor’s national insurance number.
B11          Complete the Settlor’s domicile. This is usually the country where their main home is.
The United Kingdom is not a ‘country’ when establishing a person’s domicile.
This would generally be England and Wales, Scotland or Northern Ireland.
B12-14      Leave blank – these are only applicable if A2, A3, A4 or A5 have been completed.
B15          Complete as appropriate.

Section C  Person we (HMRC) should contact 
C1            Complete the address of the person to whom communication should be sent.
C2            Complete the name of the person to whom communication should be sent.
C3            Complete as appropriate. DX stands for Document Exchange.
C4            Complete the telephone number of the person in C2.
C5            Leave blank.
C6            Complete the capacity of the person named in C2, eg Settlor.

Section D  Supplementary pages 
All boxes           

If you have a Skandia Life policy complete ‘Yes’ to the Insurance option, the supplementary page D34 will need to be completed. All other boxes should be ticked ‘No’. 

If you have a Royal Skandia Policy complete ‘Yes’ to the Foreign assets option, the supplementary page D39 will need to completed. All other boxes should be ticked ‘No’. 

Section E  Assets in the UK where tax may not be paid by instalments 
E1-E10     Complete with ‘0’.
E11          Complete if you have a Skandia Life policy, these will usually be the premium value, however, for the Discounted Gift Trust it would be the Discounted Value of the Gift.
Complete with ‘0’ if you have a Royal Skandia policy.
E12-E14    Complete with ‘0’.
E15           Complete the total assets. This will be the same figure as completed in E11.
E16           Complete with ‘0’.
E17           Complete the net total of assets less liabilities. This will be the same figure as completed in E15.
E18           Complete with ‘0’.
E19           Complete the chargeable value of assets in the UK where tax may not be paid by instalments.

This will be the same figure as completed in E17. 

Section F   Assets in the UK where tax may be paid by instalments 
F1-F17      Complete with ‘0’.
F18           Complete any annual exemption being deducted. The maximum this will be is £6,000.

Sections G & H Summary of Chargeable Event and Working out the tax 
Under the present law you do not have to calculate the tax that is due. Therefore go directly to Section J. 

Section J   Authority for repayment of inheritance tax 
Complete the names of the people who want to receive any refund of tax. 

Section K  Declaration 
K1            Complete ‘100a’.
K2            Complete ‘D34’ if you have a Skandia Life policy, or ‘D39’ if you have a Royal Skandia policy. Ensure all the declarations are read and the Settlor should sign, date and put their capacity ‘Settlor of the Trust’.

This form relates to gifts and other transfers of value which are subject to the relevant property regime.

Name of transferor and Date of transfer
Complete the name of the transferor (the Settlor) and the date of the transfer (the date of the trust).

1 About the transfer
1.1 Name and addresses of the transferees, relationship with transferor, share and/or interest taken.
As the transfer is being made into a Discretionary Trust complete:
The name and addresses of the Trustees, complete the relationship as ‘Trustees of the [name of the Settlement]’ and Share 100%.
1.2 Complete ‘Yes’ as the Settlor is paying the tax.
1.3 Complete ‘No’.
1.4 Complete ‘0’.
1.5 Complete ‘No’ go to 1.7.
1.6 Leave blank.
1.7 Complete ‘No’ go to 1.9.
1.8 Leave blank.
1.9 Complete ‘No’ go to 1.11.
1.10 Leave blank.
1.11 Complete ‘No’ go to 1.13.
1.12 Leave blank.
1.13 Complete ‘Yes’.
1.14 Complete as follows ‘The gift was made to a Skandia Life/Royal Skandia Life assurance/Redemption Bond which was settled into a Discretionary/Discounted Gift Trust’.

2 Earlier transfers
2.1 Complete ‘Yes’.
2.2-2.5 If the Settlor has made a previous chargeable lifetime transfer within the last seven years complete ‘Yes’ and complete 2.4 and 2.5 as appropriate.
If no previous chargeable lifetime transfers have been made in the last seven years leave blank and complete 2.6 only.
2.6 Complete the nil-rate band applicable at the date of the transfer (the date of the trust).

3, 4, 5, 6 & 7 These Sections can be left blank

Completion of D34 Skandia Life Policies ONLY
Complete the name of the Settlor, the date of the transfer (the date of trust) and the name and address of the insurance company – see address overleaf.
IP1       Value of the policy at the transfer date, this would normally be the premium value. However, for Discounted Gift Trust cases it will be the ‘Discounted Value of the Gift’.
IP2       Complete the value of all premiums paid on the policy.

Completion of D39 Royal Skandia Policies ONLY 
Complete the name of the Settlor and the date of the transfer (the date of trust).
1           Assets outside the UK where tax may not be paid by instalments.
FP1      Leave blank.
FP2      Complete ‘Trustees of the [name of settlement] Royal Skandia Bond [prefix and number eg CIB/CRB 12345]’.
Complete the value of the gift eg this would usually be the premium value, for a DGT it will be the ‘Discounted Value of the Gift’.
FP3       Complete with the figure from FP2.
FP4       Leave blank.
FP5       Complete Figure from FP3.
FP6       Complete with any exemptions eg annual exemption.
FP7       This will be FP5 less box FP6.
2            All other sections can be left blank.