IHT 400 Form Q7 & Q8 Query

3Snowy

Can anyone please explain what these questions are referring to. I’m sure we can transfer 100’/. of my dads RNRB from 35 years ago but don’t know how to answer these questions. Q7 My dad left very little, no will or property. Is Q8 answer £2000000  (2million)? as per taper now? So confusing!  Many thanks

relaxtwotribes

Are you sure these are questions on Form IHT400?

3Snowy

Thank you, no there on 436 transfer of RNRB. Can anyone advise??

relaxtwotribes

Find out from who dealt with your Dad's estate what the total assets were in his estate and put that figure in Box 7.  Box 8 will be £2 million, because none of his RNRB was used as it did not exist 35 years ago.

K_potts

I queried these questions with the iht helpline and they advised me to only put what is owned by the individual in our case everything was joint so we entered nil and 2 million in the other box

3Snowy

Thank you I did think that but trying to fill in these forms has made me doubt I even know my own name!!

3Snowy

Could someone please explain what an excepted estate is?  Thanks

Keep_pedalling

3Snowy said:

Could someone please explain what an excepted estate is?  Thanks

An excepted Estate means that no Inheritance Tax is due. There are four main reasons why an Estate would not have to pay Inheritance Tax.

1. The value of the Estate is below the current Inheritance Tax threshold

Inheritance Tax (IHT) is only due if the total value of the Estate is over the Inheritance Tax threshold, which is currently £325,000. Therefore the Personal Representative must find out how much the deceased person’s assets are worth. If the total value of the Estate is less than £325,000 then Inheritance Tax won’t be due. This threshold may actually be higher if the deceased was married (see below).

2. A spouse’s nil rate band can be transferred

If the deceased was married and his or her spouse has already died, it may be possible to increase the Inheritance Tax threshold. This is because since October 2007, married couples have been able to combine their individual tax free thresholds.

So when the first spouse dies, their Personal Representatives must work out how much Inheritance Tax must be paid, if any. When the second spouse dies, whatever is left over from the first spouse’s tax free threshold can be added to the second spouse’s tax free threshold. This is called the transferrable nil rate band.

There is also a ‘Residence Nil Rate Band’ which might apply if an Estate is being left to the deceased’s children. For more information on this see Residence Nil Rate Band Explained.

This means that if a husband dies first and none of his tax-free threshold is used up, it doubles the wife’s threshold to £650,000. When she dies, the person administering her Estate can apply to transfer her late husband’s nil rate band to her Estate. Inheritance Tax will then only be payable if the total value of her Estate is worth more than £650,000.

3. It’s an exempt Estate

Inheritance Tax won’t be due if the deceased leaves everything to a surviving spouse, or a charity or organisation that qualifies as being exempt from Inheritance Tax, and the Estate is worth less than £1m. This is called an exempt Estate.

4. The deceased lived abroad

If the deceased was living abroad, Inheritance Tax might not be due in England and Wales. A ‘foreign domiciliary’ means that he/she lived abroad on a permanent basis, died abroad, and held few assets in the UK.

Therefore you father’s estate was an excepted estate, but your mother’s estate is not.

3Snowy

Thank you. So in a nutshell because my mum did not leave her estate to a spouse, regardless of it being less than a million, and the NRB & RNRB we can apply for it is therefore not classed as Excepted  . I think that’s where I’m getting confused re Excepted estates?
Is this correct please?

Keep_pedalling

3Snowy said:

Thank you. So in a nutshell because my mum did not leave her estate to a spouse, regardless of it being less than a million, and the NRB & RNRB we can apply for it is therefore not classed as Excepted  . I think that’s where I’m getting confused re Excepted estates?
Is this correct please?

Yes.

3Snowy

Thank you, very much.  We need to have a big rethink. So, if we get a expert to do paperwork we can put all that down and deduct as an Executors expense from Mums estate? What sort of expert is best please?