IHT205

gorillagirl

Help! I am trying to fill in IHT205 - We are not going to have to pay IHT but seems we have to provide details as proof. In section 9, although mum had kept fairly good accounts, I need to put down several gifts by cheque for which there are no names due to mum not filling in her cheque stubs, missing bank statements & 1 missing cheque book - can I just say family member? I have asked family but they don't have records either.

How does the 14 year rule on gifting affect us? She gave 7 years worth of large cash gifts to family but not enough to be charged IHT.

Finally mum had a home reversion plan which requires £54000 to be repaid - where do I enter this on IHT205? When she took out the plan (year 2000) she benefitted from £10,000 lump sum & has recieved £107 a month since then - does this need to be entered anywhere?

Keep_pedalling

If all her gifts were made in cash, then you don’t have to worry about the 14 year rule, which only kicks in when using certain trusts. 

You don’t have to provide proof of the gifts. If you have done all you can to trace who had what just put the names of those you do know about plus some unknown recipients. Either attach a covering letter or add a note in box 13.

Are you sure it was a home revision plan she had? If it is, the company providing it will own a portion of her home so you only declare the value of your mother’s share in 9.1. Other types of equity release are types of mortgage so for those you would put the full value of the house, and the amount owed to the ER company in box 12.2.

gorillagirl

Thank you for your prompt reply. That's really helpful but I'm very confused. Did you mean to say 9.1? I thought that was for gifts? There doesn't seem to be a place for it in section 9. So I assumed section 12.

The 'sum assured' I.E. £54,000 plus interest, after death, has to be repaid when we sell the property. So the difference will pass to her estate (flat is valued at £135,000).

On her latest statement it states:

Scheme Description: Extra Income Plan - Equity release reversion.

AND

You are not required to make any repayments during the life of this equity release loan. The loan plus all of the interest due to Newcastle Building Society will be repaid from the sale of your home.

Any comments gratefully received!

Keep_pedalling

gorillagirl said:

Thank you for your prompt reply. That's really helpful but I'm very confused. Did you mean to say 9.1? I thought that was for gifts? There doesn't seem to be a place for it in section 9. So I assumed section 12.

The 'sum assured' I.E. £54,000 plus interest, after death, has to be repaid when we sell the property. So the difference will pass to her estate (flat is valued at £135,000).

On her latest statement it states:

Scheme Description: Extra Income Plan - Equity release reversion.

AND

You are not required to make any repayments during the life of this equity release loan. The loan plus all of the interest due to Newcastle Building Society will be repaid from the sale of your home.

Any comments gratefully received!

Sorry, senior moment ignore those numbers 

Home revision plans pay a lump sum for a share in the ownership. What you seem to have there is an income plan, so the estate still owns the hose, but there will be a charge on it from the ER company. 

If you check the land registry you should see a restriction applied by NBS with your mother as the sole owner.

https://www.gov.uk/search-property-information-land-registry

So once you have the final figures the value of the flat goes in 11.8 and the loan in box 12.2.

gorillagirl

That's what I thought too.Thank you for helping me. Apparently this is all due to change - hope it's a while before I have to do another...