When someone dies, there are forms to fill in and send to HMRC. There are different forms and the correct forms depend on whether or not there is any inheritance tax to pay. Consequently, before the forms can be completed, it is necessary to value the estate for inheritance tax purposes and determine whether any tax is due.
The inheritance tax forms should be sent with the application for the grant of representation. This is the legal right to deal with the estate.
Form IHT205 – no IHT to pay
Where there is no IHT to pay (for example if the whole estate has been transferred to a spouse or civil partner or the value is below the nil rate band, currently £325,000), short form IHT205 (2011) should be used. This form can also be used where the whole estate is left to a charity with a charity reference number. However, it cannot be used for estates worth more than £1 million, even if there is no IHT to pay.
The form, together with notes on its completion is available on the Gov.uk website at: www.gov.uk/government/publications/inheritance-tax-return-of-estate-information-iht205-2011
The information can also be completed online.
There is no deadline for the submission of form IHT205.
Form IHT217 – claim to transfer nil rate band for excepted estates
The unused portion of the nil rate band on the death of the first spouse or civil partner can be transferred for use against the surviving spouse or civil partner’s estate on their death. Where there is no tax to pay and form IHT205 has been completed, a claim to transfer the unused nil rate band should be made on form IHT217 and filed with form IHT205. Form IHT217 is available on the Gov.uk website at:
Form IHT400 – IHT to pay
The full form, IHT400, should be used where there is inheritance tax to pay, or where the short form cannot be used as the estate is worth more than £1 million.
The form is available on the Gov.uk website, together with guidance notes on its completion, at: www.gov.uk/government/publications/inheritance-tax-inheritance-tax-account-iht400
There is a deadline for submitting the form – a year from the end of the month in which the person died. Penalties may be charged if the form is submitted late.
Form IHT402 – claim to transfer unused nil rate band
Where there is IHT to pay and the inheritance tax threshold is increased by transferring the unused portion for a late spouse or civil partner, form IHT402 should be used to work out the percentage and claim the transfer. Form IHT402, which is available on the Gov.uk website at
www.gov.uk/government/publications/inheritance-tax-claim-to-transfer-unused-nil-rate-band-iht402, should be submitted with form IHT400.
Form IHT207 – person who died lived abroad
If the person who died lived abroad permanently and had less than £150,000 in UK assets (cash, bank accounts or listed stocks and shares), form IHT207 should be used rather than form IHT205 if there is no tax to pay. It is available on the Gov.uk website at: www.gov.uk/government/publications/inheritance-tax-return-of-estate-information-iht207-2006
Get in touch with Inform if you need further advice on IHT estate returns or any other tax related matter.
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