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Relevant values for IHT purposes

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  • Relevant values for IHT purposes

    Hello! Iím presently trying to help someone with a probate application, and, unfortunately, I seem to have managed to thoroughly confuse myself, (and them!).

    Does anyone know please if it is necessary to lodge inheritance tax forms with the Inland Revenue when the value of an estate is greater than £325,000, but comes to less than £500,000 when the value of the main residence left to the deceasedís child is included? The gross value of the estate is around £530,000, but when the deceasedís debts are deducted, the net value is around £484,500, including the house. I assume not, but the position is not absolutely clear to me.

    My other query relates to the value of the main residence which is around £165,000. Am I right in thinking that the exempt value in this case would be £325,000 plus the actual value of £165,000, i.e., £490,000? Or would it be £325,000 plus the £175,000 main residence allowance?

    Clarity on the above queries would be very much appreciated!

    Tags: None

  • #2
    Please read Section 7 of PA1P Probate Application form.
    An applicant needs to show how much IHT to pay using the IHT forms stated. If there is no IHT to pay this still needs to be shown on the appropriate form.
    You were right first time. RNRB is £165k making a total £490k NRB


    • #3
      In the circumstances stated, there might be no inheritance tax to pay if the net estate is under £490,000 but because the net estate is greater than the NRB of £325,000 and you need to claim the residential nil rate, then this is not an excepted estate. You need to submit form IHT 400 etc. to HMRC to claim the RNRB.

      This all assumes that the deceased did not have transferable allowances from a predeceasing spouse ot civil partner.


      • #4
        Yes and IHT 435 to claim the RNRB


        • #5
          The 3rd sentence in my post above is incorrect. If the deceased died on or after 1 Jan 2022 and the estate is valued under £325k (or £650k if there is a full transferable allowance from a predeceased spouse or civil partner) then this is an excepted estate. IHT Form 205 is not now required and only calculated figures are required on PA!P Section 7
          HMRC have saved themselves a lot of work checking forms.


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