IHTM31150 - COMPASS: dealing with deficits

COMPASS does not automatically offset deficits ( IHTM31500) to other assessment groups ( IHTM31012). This is because there is no consistent way of dealing with them.

When you amend the values in a deficient assessment group, and it remains in deficit, COMPASS will set the net value of that assessment group to zero.

It will not warn you that the Group is in deficit until you try to raise an assessment. At that stage COMPASS will put up a message:

NIOP only

Where you have only NIOP and no other assessment groups in the Entry ( IHTM31011) against which to set the deficit, you need do nothing more. The assessment group having been set to zero will aggregate with the other Entries correctly and, when an assessment is raised, will show no tax as due.

NIOP and IOP

Where there are numerous assessment groups at that Entry, you must calculate the deficit manually and deduct it against the other assessment group(s) to ensure that it is correctly accounted for.

• COMPASS does not automatically offset the deficit against another assessment group. It is for you to make sure that the assessments reflect deficits at other assessment groups within that Entry.
• Enter the deficit as a liability or creditor in the other assessment group – describe it as “deficit”.

Finding the deficit

You may be able to see the amount of the deficit calculated by COMPASS. Before you click OK in the warning window (clicking OK changes the negative value to zero) move the window so that you can see the table of assessment groups in the Calculation of Inheritance Tax window underneath.

The deficit may be shown in this window. Unfortunately, if the assessment group you want is not shown, you cannot move around that table. In that case you will have to calculate the deficit yourself.