Probate form IHT400 when inheritance tax is due

Lawpack on March 27, 2020

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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Applying for probate: Completing Form IHT205

Lawpack on March 27, 2020

When applying for a grant of probate to administer someone’s estate after they have died, you must complete various probate forms and send them to the Probate Registry. For more information on probate see Lawpack’s DIY Probate Kit.

The main probate form to use to apply for probate is a PA1 Probate Application Form. You will also need to complete Form IHT205 if you don’t expect inheritance tax to be due on the estate.

Do you need Form IHT205?

Form IHT205 is used where:

  • the deceased died on or after 6 April 2011; and
  • the gross value of the estate for inheritance tax is less than the inheritance tax threshold (£325,000) or is less than £1,000,000, and there is no inheritance tax to pay because of spouse, civil partner or charity exemption.

Completing Form IHT205 – Probate Application Form – Short Form of Return of Estate Information

In the IHT205 form, the following information is requested:

Gifts

  • Did the deceased make gifts totalling more than £3,000 per year in the seven years prior to the date of death?
  • Did the deceased make a gift, but continue to benefit from all or part of the gift (e.g. the deceased gifted their home to a child but continued to live in it)?

Assets

  • Did the deceased give up the right to benefit from assets held in trust within seven years of the date of death?
  • Did the deceased benefit from assets held in trust?
  • Did the deceased own or benefit from assets held abroad?
  • Did the deceased hold any life assurance policies?
  • Did the deceased’s have any pension policies?
  • What is the gross value of the deceased’s assets including, cash and money held in bank accounts and savings accounts?
  • Did the deceased have any stocks and shares?
  • Did the deceased have any partnership or business interests?
  • Did the deceased have any outstanding debts?

Sending Form IHT205 to the Probate Registry

Once you have completed Form IHT205, along with Form PA1, make copies of all of the probate forms and send them to the Probate Registry. Send the original Will and the deceased’s death certificate along with them. You should also make copies of the deceased’s Will and death certificate for your own records. If you cannot deliver these documents in person at the Probate Registry, you can send them by registered post.

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