IHT205 need to report or not?

IronDuke

After the recent death of my mother I am executor of her Will and in the process of such a task after trying to educate myself came to the conclusion I needed to fill out IHT205 and began to so do.

Yesterday I rang the HMRC Inheritance and Probate help line to clarify two questions and after a long discussion of my late mother's estate I was told that as her assets were £205,000 and well below the Nil Rate Band I didn't need to complete it after all.

However, after re-reading the rules it seems to imply that even if the estate is below the NRB I still need to fill it out. I am now very confused.

I shall probably ring the help line again next week when I have time but does anyone have personal experience of completing IHT205?

As an aside I don't need probate which was also discussed in my conversation with HMRC.

Tom99

[FONT=Verdana, sans-serif]If the estate includes a house not in joint names you definitely need probate and most banks have a limit above which probate is needed to release funds again unless the account is a joint one, say £30,000 but they do differ a lot.[/FONT]

Keep_pedalling

IHT205 is for smaller estates, if it was over the nil rate band you would need to fill in IHT400

If the estate owns property then you need probate, if there is no property you will still need probate to release larger sums held in banks, and any equities or bonds that may be held.

Keep_pedalling

I have just read your other thread, where it appears all her estate is all cash and already in accounts in your name. Although you should never have done that, it does mean you will not need probate to distribute the estate.

getmore4less

You only need a grant for property if it is in sole name of the deceased, if it was in joint names even tenants in common a grant is not needed.


IHT is a voluntary capital return of a deceased estate if there is no tax to pay then reporting(sending in the forms) can be be bypassed as long as a grant of administration is not required then it will be needed.


It is still a good idea to do a full inventory and account and make notes in case any queries come up in the future, it gets very easy to forget the detail if not written down a completed IHT205 in the file would help complete the picture and confirm to anyone picking up the file IHT was not due.

IronDuke

After my mother's property was sold I needed to open three accounts to ensure that the money was protected under the terms of the FSCS compensation scheme and was only a temporary measure whilst I registered the LPA with the banks.

Unfortunately before I could do that my mother died suddenly and unexpectedly which stopped that in its tracks.

IronDuke

getmore4less wrote: »

You only need a grant for property if it is in sole name of the deceased, if it was in joint names even tenants in common a grant is not needed.


IHT is a voluntary capital return of a deceased estate if there is no tax to pay then reporting(sending in the forms) can be be bypassed as long as a grant of administration is not required then it will be needed.


It is still a good idea to do a full inventory and account and make notes in case any queries come up in the future, it gets very easy to forget the detail if not written down a completed IHT205 in the file would help complete the picture and confirm to anyone picking up the file IHT was not due.

Hi,

Can you clarify your second paragraph for me I suspect I'm reading it incorrectly.

Thanks.

Keep_pedalling

IronDuke wrote: »

After my mother's property was sold I needed to open three accounts to ensure that the money was protected under the terms of the FSCS compensation scheme and was only a temporary measure whilst I registered the LPA with the banks.

Unfortunately before I could do that my mother died suddenly and unexpectedly which stopped that in its tracks.

For future reference, temporary higher balances from things such as house sales are covered, and you also have the option of NS&I where you can hold £1M secured by the government.

IronDuke

Keep_pedalling wrote: »

For future reference, temporary higher balances from things such as house sales are covered, and you also have the option of NS&I where you can hold £1M secured by the government.

Hi,

I was told by one building society that for 6 months (I think it was) the money was protected but when I checked if I remember correctly it said against your main home and of course the home wasn't mine but my mother's so I assumed it didn't apply.

"Real estate transactions (property purchase, sale proceeds, equity release) relating to a depositor's main or only residence."

I didn't even consider NS & I I must admit.

Keep_pedalling

IronDuke wrote: »

Hi,

I was told by one building society that for 6 months (I think it was) the money was protected but when I checked if I remember correctly it said against your main home and of course the home wasn't mine but my mother's so I assumed it didn't apply.

"Real estate transactions (property purchase, sale proceeds, equity release) relating to a depositor's main or only residence."

I didn't even consider NS & I I must admit.

It would have applied if the account was opened in her name.

IronDuke

Keep_pedalling wrote: »

It would have applied if the account was opened in her name.

If I had realised that it would have saved me a whole load of time and trouble!!!