Which form to use IHT 205 or 4000?

poppystar

3Snowy said:

Thank you thank you for your advice but what neither I nor my sister can grasp is if an estate is under 1 million it is classed an excepted estate. It says you can complete IHT205.  My mums died in 2019 and is under this so amount so we want to fill in IHT 205, but we can’t claim RNRB (300k)on this form, only NRB (650k).  So how can anyone ever claim £950k allowance on this form!! Please advise. Thanks

If you read the guidance notes you will see that the £1m refers to estates where it passes “to spouse/civil partner or qualifying charity or other uk national body”. I don’t think from what you’ve said yours does qualify on any of these criteria? 

Believe me we’d all like to fill in IHT205 and be able to transfer unused RNRB. Unfortunately that’s not the case and sadly another tree must give it’s life for the mountain of paperwork IHT400 and it’s schedules entails! 

3Snowy

My Dad, who died 35 years ago, left what he had to Mum ( small amount, no investments or property then, so it passed to spouse. Mum has now left her money, property, to me and my siblings, direct descendants, and it’s all less than a million. That’s why I think IHT 205 might be used in our case as no IHT to pay. Any further advice please. 

poppystar

3Snowy said:

My Dad, who died 35 years ago, left what he had to Mum ( small amount, no investments or property then, so it passed to spouse. Mum has now left her money, property, to me and my siblings, direct descendants, and it’s all less than a million. That’s why I think IHT 205 might be used in our case as no IHT to pay. Any further advice please. 

But you are not her spouse or a charity or a uk national body. Have you printed a copy of the guidance notes to help you? 

The difference between IHT205 and IHT400 is not whether or not tax is due, is this causing confusion? There are cases - like where you want to claim RNRB - where you need to fill in IHT400 but won’t need to necessarily pay inheritance tax.

3Snowy

Thank you.  I am thinking my Mums spouse left what he had to her and now Mum has left it to her kids, she didn’t have a spouse to leave it to.  I also think I am stuck trying to understand how someone can have up to a million pound estate, can complete IHT 205 but only use £650k(2 £325k )NRB and not pay IHT.  Don’t they have to utilise the £300k (2 £150k)  RNRB and if they do how/ when do they claim it?  Why make people complete IHT 400 if no tax to pay isn’t that what 205 is for?

poppystar

3Snowy said:

Why make people complete IHT 400 if no tax to pay isn’t that what 205 is for?

No, and you would have to ask HMRC why. 

Probably best not to get too hung up on the theoretical £1m and just use all the guidance notes and/or the helpline to work through the estate you are dealing with. You need to complete IHT400 and the relevant schedules as others have also indicated.

3Snowy

Tried completing the 400  and I don’t understand some of the Qs let alone answer them. I hate to give up, hence why I’m stuck trying to figure out the 205 and the million pound issue. I’m obviously not as bright as I thought and will probably have to pay someone to do the 400 but seems so unnecessary. Thank you

Keep_pedalling

3Snowy said:

Tried completing the 400  and I don’t understand some of the Qs let alone answer them. I hate to give up, hence why I’m stuck trying to figure out the 205 and the million pound issue. I’m obviously not as bright as I thought and will probably have to pay someone to do the 400 but seems so unnecessary. Thank you

Try and get IHT 205 out of you head, you have no choice but to use IHT 400 as do all estates claiming the transferable RNRB. If you work your way methodically through IHT 400 and the 4 supplementary  sheets associated with the NRB allowances it should become a bit clearer, but if it is really stressing you out it might be worth paying a few hundred for some professional help with the forms the costs of which should be Bournemouth by the estate not you personally.

nanapop1977

As others have said, forget IHT 205 and just go with IHT 400. Don't give up - if you work through it methodically, maybe using a printed blank form and using pencil, you can make a draft before you start to fill out the form online. The guide is helpful  (but long if you print it!) and certainly clarified things for me. Once you get your head round which additional schedules you need, and you have all the figures, it is perfectly do-able. Good luck! And re-post if you are stuck on particular questions.

badger09

nanapop1977 said:

As others have said, forget IHT 205 and just go with IHT 400. Don't give up - if you work through it methodically, maybe using a printed blank form and using pencil, you can make a draft before you start to fill out the form online. The guide is helpful  (but long if you print it!) and certainly clarified things for me. Once you get your head round which additional schedules you need, and you have all the figures, it is perfectly do-able. Good luck! And re-post if you are stuck on particular questions.

In the 3+ weeks between OP's last post and yours, he/she seems to have figured all the forms out

https://forums.moneysavingexpert.com/discussion/6189882/what-order-to-send-in-iht-400-421-and-pa1p#latest