TSEM5800 – Heritage maintenance funds

Background

Trusts that maintain historic buildings are known as heritage maintenance funds (HMFs).

There are certain Inheritance Tax advantages for HMFs. The responsibility for deciding whether a property (the heritage property) is of sufficient historical significance and whether trusts satisfy certain conditions lies with Capital Taxes. If the provisions apply, Capital Taxes

• issue a direction under Paragraph 1, Schedule 4 IHTA 1984
• advise HMRC Trusts Nottingham.

Where Capital Taxes have issued a direction, there are special income tax provisions for Heritage Maintenance Funds, in ITA Chapter 10. ITA/Sections 507 to 510 allow us to disapply certain taxing provisions on the settlor and any occupier of the heritage property. ITA/S511 prevents double taxation of income in certain circumstances. ITA/Sections 512 to 517 provide for an additional tax charge on the trustees if the HMF does not stick to the rules agreed with Capital Taxes.

If Capital Taxes do not issue a direction, the normal trust rules apply.

Trust office dealing with HMFs

HMRC Trusts Nottingham deal with all such trusts.

Office other than HMRC Trusts Nottingham

If you learn of such a trust, pass what information/documentation you have to HMRC Trusts Nottingham. Do not set up the case in your office.