IHTM45022 - treatment of reduced rate on COMPASS: temporary workaround before the grant and for datacapture
Identifying cases where the reduced rate applies
Until we have the new form IHT430 in place it may be difficult to identify cases where the reduced rate applies. So we will need to adopt a temporary procedure to identify these cases at an early stage. The procedure will change as new forms are developed and when COMPASS is amended.
All accounts are sifted when they first come into the office, before the IHT421 is issued. Cases where there is any charity exemption will be identified and separated at this stage. The accounts will be flagged to show that charity exemption applies. The cases will be examined once a day by a Compliance expert who will identify those cases where:
- the reduced rate applies, and
- survivorship property needs to datacaptured as a separate entry.
The Compliance expert will give guidance to the datacapturers so they can datacapture these cases correctly.
The datacapturers should clearly mark any case where charity exemption is claimed by marking the file 'charity case' in bold letters in the notes box on the file cover. This will help caseworkers to remember that they may need to look at the question of whether the reduced rate applies again if there are any changes that affect the values in the estate or the amount passing to charity.
Any case where the reduced rate may apply must be datacaptured in line with the instructions at IHTM45021. It is important that any joint property that passes by survivorship is datacaptured as a separate entry in COMPASS. If the taxpayer or agent has applied the reduced rate when they calculated the tax due on delivery the initial calculation on COMPASS will not agree with the taxpayer or agent's calculation. If you are the datacapturer you should not make any adjustments on COMPASS to try and correct the position. Instead, you should write ‘reduced rate’ in bold letters in the notes box on the file cover. This will draw attention to the fact that the reduced rate has been applied.