HMRC has released an updated version of the Inheritance Tax account form (IHT400) notes. The IHT400 is the main form used as part of the probate or confirmation process where there is Inheritance Tax due or if the deceased’s estate does not qualify as an ‘excepted estate’.
These IHT400 Notes have been updated to reflect budget changes and a change within the probate process, including a new grant on credit section.
Inheritance tax is levied on a person’s estate when they die and can also be payable during a person’s lifetime on certain trusts and gifts. The rate of inheritance tax payable is 40% on death and 20% on lifetime gifts. There is a nil-rate band, currently £325,000 below which no inheritance tax is payable.
The main residence nil-rate band (RNRB) is a transferable £175,000 allowance for married couples and civil partners (per person) when their main residence is passed down to a direct descendent such as children or grandchildren after their death. The RNRB is on top of the £325,000 inheritance tax nil-rate band threshold. There are also a number of inheritance tax reliefs including a reduced rate of inheritance tax of 36% that applies where 10% or more of a net estate is left to charity.
Get in touch with Matthew Hill, our Trusts and Estates Tax Manager for help on this complex topic.