Inheritance tax help

lisa7

Hi there - I'm hoping someone can help shed some light. Completing an IHT205. In last 7 years the only gifts were 3 x £5000 in 2020. Do I list these? Will there be an amount subject to inheritance tax? The amount of the estate is less than £125k.
Also - do bank amounts need to be exact. Have  the amount a few weeks ago when I notified the bank but not sure if anything has gone out since. Cannot access account to check as it's frozen
Thank you 

xylophone

The deceased had (at the least) a "nil rate band" of £325,000.
If these were the only gifts he made in the last seven years and his total estate was only £125,000 then it would seem that there is no IHT to pay.

naedanger

lisa7 said:

Hi there - I'm hoping someone can help shed some light. Completing an IHT205. In last 7 years the only gifts were 3 x £5000 in 2020. Do I list these? Will there be an amount subject to inheritance tax? The amount of the estate is less than £125k.
Also - do bank amounts need to be exact. Have  the amount a few weeks ago when I notified the bank but not sure if anything has gone out since. Cannot access account to check as it's frozen
Thank you 

You are required to list the gifts but you can deduct £6,000 - as there is an annual allowance of £3,000 and you can carry forward the unused allowance from the previous year.

That said it all makes no difference as the total estate plus gifts is well below the threshold at which IHT becomes payable.

Bank accounts are supposed to be exact (although you can estimate any accrued interest). But because the estate is well below the IHT threshold HMRC are not going to query anything minor.

(Are you sure you need to apply for probate? You probably do, but some estates don't e.g. house in joint names and money with high street banks and building societies with total in each less than typically £25k but it varies by bank - some will release up to £100k without probate.)

lisa7

Thank you - most of the money is in income bonds so I think we'll need to apply for probate

naedanger

lisa7 said:

Thank you - most of the money is in income bonds so I think we'll need to apply for probate

If they are National Savings and Investments income bonds and the amount is over £5k then I think you will need probate.