Form IHT 402

3Snowy

Hi, could someone please explain why on this form they ask for the NRB of deceased spouse when we are trying to claim TNRB for my late dad now that mum has died. It was CTT then & only £64k when dad died and this transfer was not even in existence then. Many thanks for clarifying if possible. 

naedanger

Had the earlier deceased spouse left any of their estate to someone other than their spouse then HMRC needs to work out what proportion of the TNRB is now available.

Suppose the NRB (or equivalent) was £100,000 when the earlier deceased spouse died. And suppose that spouse left £30,000 to friends and relatives other than their spouse with the remaining £70,000 going to their surviving spouse. Now that that the surviving spouse has died, only 70% of the TNRB is now available. (However to calculate the 70% figure HMRC need to know what the NRB was when the earlier spouse died - since if the NRB was anything other than £100,000 you would not get 70%.)

If the earlier spouse left their whole estate to their spouse then I don't think the figure you enter for the NRB when they died will make any difference. (You will still get 100% in box 18 of IHT402.)

This is only what I think. I am a novice on these forms and the issue you have raised does not affect me. I would not guarantee I am correct, especially in your case where the earlier death was so long ago. 

3Snowy

Thank you, I was thinking along the same lines as I know a lot seems to depend on percentages. My Dad left all he had to Mum, who died last year so I think she should get double of her £325k NRB allowance. It’s just I was worried about only getting another £64k if I put that on the form. 

naedanger

If you follow through on the form then you should see the TNRB in box 20. You want this to be £325k.

So presumably:
box 9 = 64K,
Box 10 = £0 (assuming your father gave no gifts)
Box 11 = £64k
Box 12 = £0
Assuming you can also answer £0 for boxes 13 to 15 will mean box 16 is also £0
Box 17 = £64k
Box 18 = 100%
Box 19 = £325k
Box 20 = £325k (and is the TNRB you can use)