When you’re probating an estate, it’s necessary to work out which probate forms should be completed from an inheritance tax perspective. It’s essential on every grant of probate application to complete an inheritance tax form, irrespective of whether inheritance tax is payable.

When is inheritance tax due on the probate of an estate?

In general, inheritance tax is due if the value of the estate is more than the inheritance tax threshold or ‘nil rate band’:

  • The nil rate band Inheritance tax isn’t due on the first £325,000 of the value of the estate, as it’s taxed at 0%.
  • The taxable band This band applies to the remaining value of the estate over £325,000.

Certain estates can be exempted from paying IHT. Find out more on how to assess whether the estate is liable for inheritance tax.

What probate forms need to be completed?

If you assess the estate and it is liable for inheritance tax, then you must complete Form IHT400, which is valid in England & Wales and Scotland.

If you find out that it isn’t liable for inheritance tax, then you must complete Form IHT205 for England & Wales, or Form C5 for Scotland.

Completing Form IHT400 – Full Inheritance Tax Return

If the estate is neither exempt, nor exempt and excepted from inheritance tax (i.e. Form C5 in Scotland or Form IHT205 in England and Wales are not appropriate), then Form IHT400, which is used throughout the UK, must be completed.

Form IHT400 comprises 16 pages and separate Schedules numbered IHT401 to IHT421. It enables you (and HMRC) to determine whether any inheritance tax is payable. The questions on IHT400 are similar to those on the English Form IHT205 and the Scottish Form C5, but they require fuller details.

If there is insufficient space for all the information asked for, you should attach a separate sheet of paper and include the total on Form IHT400 itself.

Not every Schedule will require completion, depending on the deceased’s circumstances. If the estate includes land or buildings in the deceased’s sole name, Schedule IHT405 should also be completed. If it includes stocks and shares, list the details on Schedules IHT411 and IHT412. Schedules IHT403, IHT418 and IHT409 deal with gifts, assets held in trust and death benefits payable under pension policies respectively. These may not appear to be part of the estate, but they may need to be taken into account in order to calculate inheritance tax.

Schedule IHT404 deals with jointly-held property including land and buildings. Overseas land and buildings and other foreign property should be included in Schedule IHT417.

The inheritance tax on some types of property may be paid by installments. Page 11 of the form includes a box to be ticked, should you wish to do that.

The executors have the choice of either calculating any inheritance tax themselves or leaving it to HMRC to work it out, and the appropriate box should be ticked on page 11 of the form.

All the executors should read the Declaration on page 12 of Form IHT400 and sign it. (Do note that this differs from Form C1 and the Form C5 in Scotland which need to be signed by one executor only.)

If you have any problems completing Form IHT400, the Inheritance Tax Helpline (tel: 0845 30 20 900) can be contacted for assistance in completing the form or you can visit the HMRC website.

Use our Probate Assist service and get expert help from probate professionals on how to complete Form IHT400 correctly.

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