A gift into a relevant property trust, or to a company, is a chargeable lifetime transfer and must be reported on form IHT100a unless it is an excepted transfer. The account is due within 12 months from the end of the month of the gift, but tax is due sooner, so in practice the form goes in well before the statutory deadline.

Which lifetime gifts need an IHT100?

The IHT100 is a family of forms used to report occasions when Inheritance Tax is due on a trust. HMRC’s guidance gives each chargeable event its own form: IHT100a for a gift or other transfer of value where tax is payable immediately, IHT100b for the end of an interest in possession, IHT100c for an exit charge, IHT100d for a ten year anniversary, and further forms for special trusts, conditionally exempt assets and 18 to 25 trusts. You complete only the form for the event you are reporting, and a separate form for each event.

For a settlor putting assets into a discretionary or other relevant property trust, the right form is IHT100a. The guidance on that form is explicit that it is not for potentially exempt transfers, such as an outright gift from one person to another. Those are never reported during the donor’s lifetime; if the donor dies within seven years, the personal representatives report them on schedule IHT403 with the estate. For how the lifetime charge itself is calculated, see chargeable lifetime transfers.

HMRC’s guidance also asks you to check whether the trust needs to be registered before you start, which is a separate obligation covered under the Trust Registration Service.

When is a gift into trust an excepted transfer?

The Inheritance Tax (Delivery of Accounts) (Excepted Transfers and Excepted Terminations) Regulations 2008 (SI 2008/605) remove the need for an IHT100 for many smaller gifts made on or after 6 April 2007 (IHTM06100). There are two routes.

Cash and quoted shares only

If the gift consists only of cash or quoted shares and securities, it is excepted provided the settlor’s chargeable transfers in the previous seven years plus this one do not exceed the nil rate band (IHTM06103). The nil rate band is £325,000, so in effect a cash gift is excepted if it does not produce an immediate tax charge. Only the current gift needs to be cash or quoted shares; earlier transfers in the cumulation can be anything.

Any other assets

If any part of the gift is something else, such as a let house, unquoted shares or a life policy bought first and then assigned, two tests must both be met (IHTM06104):

  • the cumulative total of chargeable transfers, including this one, must not exceed 80% of the nil rate band, which is £260,000 at the current band; and
  • the value transferred by this gift, ignoring Business Relief and Agricultural Relief, must not exceed the nil rate band still available to the settlor.

The second test catches gifts of valuable business or farming assets that would produce no tax after relief. HMRC’s own example is a gift of family company shares worth £100,000 qualifying for 100% Business Relief, which still required an account because the unrelieved value exceeded the nil rate band left available.

IHTM06105 explains that money paid straight into an insurance product that is placed in trust from the outset is treated as cash, whereas a policy bought and later assigned to trustees is another asset and the 80% limit applies. For regular gifts relying on the normal expenditure out of income exemption, IHTM06106 says no account is needed if the gifts would be excepted even without the exemption; if denying the exemption would create tax, an account should be delivered so the exemption can be agreed.

What is the deadline, and when is the tax due?

Section 216(6)(c) of the Inheritance Tax Act 1984 requires the account within 12 months from the end of the month in which the transfer is made or, if later, three months from the date the person first becomes liable for tax.

Payment follows section 226(1) and is usually earlier than the filing deadline. Tax on a lifetime transfer made between 6 April and 30 September is due at the end of April in the following year; for a transfer made between 1 October and 5 April it is due six months after the end of the month of the transfer. The IHT100a guidance repeats these dates and warns that interest runs daily on late tax. Before paying, apply for a payment reference on form IHT122, which HMRC says should be done at least three weeks before you want to pay.

What goes on the IHT100a?

HMRC’s notes on how to fill in form IHT100a walk through each section:

  • Sections A to C: the transferor, the person dealing with the event, and the gift itself, including anything received in return and any interest the transferor or their spouse kept in the property or shares.
  • Section D and the schedules: D31 if the transferor is not a long term UK resident, D32 for stocks and shares, D33 for debts, D34 for insurance policies, D35 for household goods, D36 for buildings and other real property, D37 for Agricultural Relief, D38 for Business Relief and D39 for foreign assets.
  • Section E: each asset at open market value on the date of the event, rounded down to the nearest pound, split between assets where tax can and cannot be paid by instalments.
  • Section F: liabilities, reliefs and the annual exemption claimed in boxes F5 and F6.
  • Section G: earlier chargeable transfers and the tax calculation.
  • Sections H and I: repayment details and any tax avoidance scheme reference.

The notes also flag a change from 6 April 2026: 100% relief on qualifying agricultural and business property is now capped by relief allowances, with value above the available allowance relieved at 50%, and shares on markets such as AIM qualifying only for 50% relief (IHTM25500).

Who signs it and how is it sent?

Every liable person who signs, for example the transferor, a transferee or a trustee, must have read the declaration and agree the information is correct. HMRC accepts an IHT100a without a wet signature if all liable people’s personal details are on the declaration page and a prescribed confirmation statement is included; agents add a similar statement in the additional information section. The form is sent to the address at the bottom of the form. You do not send supporting documents unless HMRC asks, but you must keep them.

HMRC says it will acknowledge receipt and give a date by which it expects to contact you if it has questions. If the account is selected for a compliance check, it will write within 12 weeks and may ask the Valuation Office Agency or Shares and Assets Valuation to review values.

A worked example

Illustration only. In 2023 Martin gave £150,000 cash to a discretionary trust, his only chargeable transfer. In 2026 he settles a buy to let flat worth £120,000 on a second discretionary trust, with no annual exemptions left.

  • Cumulative chargeable transfers become £270,000. No tax is due because this is within the £325,000 nil rate band.
  • The flat is not cash, so the 80% test applies. £270,000 is more than £260,000, so the gift is not excepted.
  • Martin must deliver form IHT100a with schedule D36 within 12 months from the end of the month of the gift.

Had he given £120,000 in cash instead, the cash test would apply and £270,000 is within £325,000, so no account would be needed.

What if the IHT100 is late, or a gift was wrongly treated as excepted?

Section 245 imposes a £100 penalty for failing to deliver an account, a further £100 if it is still outstanding six months after the deadline, and up to £3,000 if it is more than a year late and tax would have been shown. The fixed penalties cannot exceed the tax due, and none applies if there is a reasonable excuse and the account follows without unreasonable delay.

If you held back an account believing the transfer was excepted and later discover it was not, delivering it within six months of that discovery is treated as delivering it on time (IHTM06109).

What mistakes come up most often?

  • Reporting outright gifts to individuals on an IHT100a. They are potentially exempt and are not reported in lifetime.
  • Assuming Business Relief makes a gift excepted. The value test ignores it.
  • Treating excepted as forgotten. Excepted transfers still count in later cumulations and must be included on the estate account if the settlor dies within seven years (IHTM06110, IHTM06111), so keep a record.
  • Waiting for the 12 month filing deadline and paying late. For a gift made in April, tax is due the following April.
  • Overlooking later charges. The trust will face ten year and exit charges, reported on IHT100d and IHT100c.

If you are still deciding whether to make the gift at all, compare the options in giving assets away now or leaving them in your will.

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Sources

Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 19 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.