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What is the ten year anniversary charge?

As a trustee, you'll have to pay a charge on every tenth anniversary of the date your trust was set up, if both of the following apply:

• your trust contains 'relevant property'
  
• the value of the 'relevant property' contained in your trust is above the Inheritance Tax threshold (£325,000 for the tax year 2012-13)
  

See the link 'Trusts that do and don't pay Inheritance Tax ' for more information about relevant property.

• Trusts that do and don't pay Inheritance Tax

Working out what Inheritance Tax is due

Inheritance Tax is charged at each ten-year anniversary of the trust. It's charged on the net value of any relevant property in the trust on the day before that anniversary. Net value is the value after deducting any debts and reliefs such as Business or Agricultural Relief.

If the trust was set up before 27 March 2023 the rules are different. Find out more by following the link below - 'Trusts made before 27 March 2023'.

The calculation for the ten yearly charge is complicated. Before you can begin, you’ll need the following information:

• the value of the relevant property in the trust on the day before the ten-year anniversary
  
• the value - at the date it entered the trust - of any trust property that has not been relevant property at any time while in this trust
  
• the value of any property in any other trust (except wholly charitable trusts) that the settlor set up on the same date as this trust - use the value from the date it was set up
  
• the value of any transfers subject to Inheritance Tax (whether into trusts or not) that the settlor made in the seven years before this trust was set up - use the value at the date of transfer
  
• the value of any transfers - at the date they were transferred - of relevant property out of the trust within the last ten years
  
• whether any of the relevant property was relevant property in the trust for less than the last ten years
  

You can read more about how Inheritance Tax applies to relevant property trusts in the guide below.

• Trusts that do and don't pay Inheritance Tax

• Trusts made before 27 March 2023 Opens new window

Doing the anniversary charge calculation yourself

You need to fill in form IHT100 'Inheritance Tax Account' to tell HM Revenue & Customs (HMRC) when Inheritance Tax is due on a trust. If you want to do the calculations yourself you need to enter your figures into Sections G and H on the form. You also need to complete an event form 100d.

You can download a worksheet and guidance notes to help you work out how much Inheritance Tax you'll need to pay on:

• transfers into trust
  
• transfers out of trust
  
• trust ten-year anniversaries
  

To calculate the anniversary charge, you’ll need to use Section B of form IHT100WS Inheritance Tax worksheet. You can get further help filling in this section of the worksheet with part B of the guide IHT113 'How to fill in form IHT100WS'.

• Form IHT100WS Inheritance Tax worksheet Opens new window

• Form IHT113 How to fill in form IHT100WS Opens new window

Getting HMRC to do the calculation for you

If you want HMRC to work out the anniversary charge for you, fill in form IHT100 Inheritance Tax Account leaving sections G and H blank. You need to return the form to HMRC in good time for the calculation to be worked out. Otherwise you may be charged a penalty.

You also need to complete an event form 100d.

• Completing form IHT100 Inheritance Tax Account

• Paying Inheritance Tax

• Form IHT100 Inheritance Tax Account, guidance and supplementary pages Opens new window

More useful links

• Example of how to calculate the ten yearly charge Opens new window

Useful contacts

• Contact HMRC Trusts & Estates

• Contact the Probate and Inheritance Tax Helpline