Probate & IHT order of process where no IHT payable

ljayljay

Sadly, my elderly mother passed away a few weeks ago. I am the executor & now ready to apply for probate. I initially envisaged this would be fairly straightforward, especially as I did not believe her estate would be liable to inheritance tax. This was because she was a widow & I was aware she would also be entitled to the relief inherited from my late father. My father died intestate 20 years ago with just a small amount of savings & joint ownership of the house he shared with my mother. I sorted this out for my mother at the time & it was all fairly straightforward.

Now that my mother has passed away, I would estimate her estate, mainly comprising of the house, would be valued in the region of £350/400K. I have therefore assumed that one way or another this is way below the IHT thresholds with the additional reliefs that can be added. However, I am a little unclear how the process actually works when completing the numerous HMRC IHT templates. Do I for example have more than one option? i.e. just apply for residence relief to give her a threshold of £500K or should I be applying the relief inherited from her late husband to give a threshold of £650K or do I have to automatically apply everything. Ideally, I would like to do the simplest in order to ensure that her estate of up to £400K receives the necessary relief required.

I have also got a bit muddled when looking at the probate guidance & am unsure if I need to sort out the IHT exemptions first with HMRC before applying for probate. I guess what I am looking for is guidance on which forms need completing in chronological order. 

Keep_pedalling

As you cannot use all of the available exemptions you do have the choice of which ones to use. The simplest option would be to ignore the RNRBs because topping up her standard NRB with the transferable one from her husband can be done using IHT205, rather the the more complex IHT400 which has to be used if you are claiming one or both RNRBs.

ljayljay

Thanks, I have looked at the IHT205 & that does seem fairly straightforward. Also, it appears that once submitted I can immediately apply for probate, so that will save further delays.

Just one further question. I am one of 3 executors, the other 2 being my brothers. They have requested their powers to be reserved to make it more straightforward. Besides neither are local, one lives abroad, so I have been dealing with everything anyway. Am I correct in thinking that the probate application will allow for this? Just wondering because I have just seen the advice below * for completing the IHT205....so would make sense if I can also leave off their details from the IHT205.

* For all the executors or administrators listed on your probate application, you will need their:

• official name
• National Insurance number
• date of birth
• address
• phone number

Keep_pedalling

As they are not applying for probate you only need to give their names on section 3.6 on form PA1.

ljayljay

Understood.

Sorry hopefully just one more question for now. Do I also need to complete a IHT402 to transfer NRB? & if so, do I complete along with the IHT205 or wait for HMRC to advise or complete with probate application? As I say all a bit muddled on process.

Keep_pedalling

ljayljay said:

Understood.

Sorry hopefully just one more question for now. Do I also need to complete a IHT402 to transfer NRB? & if so, do I complete along with the IHT205 or wait for HMRC to advise or complete with probate application? As I say all a bit muddled on process.

No, you need form IHT217 to claim the transferable NRB when using IHT205.

ljayljay

Ah that is interesting, glad I asked. When I collected the original will from the solicitor they advised I would need to complete a IHT402. This was after they gave me a £3,000 estimate to do the application process on my behalf. That is why I thought I would do it instead, especially as I have all of the information to hand.

buddy9

ljayljay said:

Sadly, my elderly mother passed away a few weeks ago. 

Was the death in 2021? Because the use of form IHT 205 changed for deaths in 2022.

ljayljay

Yes 5.12.21....I did notice there was a question about reporting prior to 31.12.21. Think I am now on the right track but will update if advised differently by HMRC/Probate. Looking to submit today.

scoot65

Yes, please keep us informed...... it's always good to hear any progress / issues encountered. 

ljayljay

Just an update as requested - although this only applies to estates with date of death prior to 31.12.21.

I found the process a little disjointed as initially the IHT calculators seemed to be pointing me in the wrong direction. However, once logged online using my gateway a/c I accessed the HMRC templates & managed to work my way through. I was also able to add the pre-deceased NRB, although I thought it could have been made clearer on how to do this at the beginning of the process. Whilst online there doesn't appear to any indication of which IHT form you are completing in the same way as a postal application. Not that it really mattered but it did seem to make my concerns earlier in this thread about which IHT form to complete rather irrelevant.

At the end the information provided was clear as far as proceeding to complete the probate application. Although, it would have been good if this could have also been completed within the gateway a/c rather than a separate online registration a/c for probate. The probate application was fairly straightforward and allowed for declaration for executors to reserve powers.

Anyway, probably only took a couple of hours to check my paperwork & submission was correct so not too onerous. Now just have to forward the documents requested.

A similar application from 1 January 2022 should be somewhat simpler.