IHT 400 - Negative IHT due?! 8 February 2022 at 5:58PM in Deaths, funerals & probate 6 replies 809 views

Dave1966UK

Hi

I am/was coming to the end of the lovely IHT form (why some boxes auto calculate and others don't - ahhh!), but box 118 contains a large negative number.  This makes sense to me as IHT is not due, but on other parts of the form it states if x is minus then write 0.  118 does not say this.  I called and the guy was not the most helpful telling me he couldn't tell me what numbers to put in - I only asked if a negative number was possible and what to do about it.

I downloaded the IHT400 calculation form (it does not apply to us, but to see how it coped) and entered the Residence Nil Rate Band, Zero Rate Band, and Value Chargeable and it says 0 - what I expected.  It even has a note saying if the value was minus to write zero.

So should I take out my negative value in 118 and write 0?  I would include page 1 of the IHT400 calculation form which shows that as backup.

David 

SeniorSam

I believe that if IHT is not payable after all the allowances, then it is IHT205 form and not IHT400.  The IHT400 form usually re-directs to that  when no tax is due.

Keep_pedalling

SeniorSam said:

I believe that if IHT is not payable after all the allowances, then it is IHT205 form and not IHT400.  The IHT400 form usually re-directs to that  when no tax is due.

Big changes implemented for deaths occurring after 1st Jan this year, IHT 205 has now become obsolete, no IHT forms needed for most estates where IHT is not applicable.

Dave1966UK

Mum died in September 2021 and the estate is over (just) the £325000 nil rate so whilst no IHT is due, full reporting on IHT400 is needed I believe :-(  

Keep_pedalling

Dave1966UK said:

Mum died in September 2021 and the estate is over (just) the £325000 nil rate so whilst no IHT is due, full reporting on IHT400 is needed I believe :-(  

If you need the RNRB you will need to fill in IHT400, if she was a widow and there is unused transferable NRB available you can probably get away with 205.

Zanderman

Dave1966UK said:

Hi

I am/was coming to the end of the lovely IHT form (why some boxes auto calculate and others don't - ahhh!), but box 118 contains a large negative number.  This makes sense to me as IHT is not due, but on other parts of the form it states if x is minus then write 0.  118 does not say this.  I called and the guy was not the most helpful telling me he couldn't tell me what numbers to put in - I only asked if a negative number was possible and what to do about it.

I downloaded the IHT400 calculation form (it does not apply to us, but to see how it coped) and entered the Residence Nil Rate Band, Zero Rate Band, and Value Chargeable and it says 0 - what I expected.  It even has a note saying if the value was minus to write zero.

So should I take out my negative value in 118 and write 0?  I would include page 1 of the IHT400 calculation form which shows that as backup.

David 

I know this thread is 8 months old but just thought I'd report exactly the same experience.  The quaint IHT400, which still auto-calculates some boxes but leaves you to do others (why HMRC, just why!?) still insists, in Box 118, in entering a negative figure if no tax is due. Making the next box, box 119, calculating tax due by multiplying box 118 by 40%, give a negative tax due - rather than the more obvious and helpful, er, Zero.  

Within IHT400 there seems no way around this, so, apart from that tiny minus sign, it appears the estate owes tax. There is no subsequent box to clarify this.

However, like the OP, by ignoring boxes 111 to 119 and using the extra form  "IHT400 Calculation" (suggested before Box 111 as an alternative way to calculate things) the figure of zero is readily obtained. 

HMRC suggest using that "IHT400 Calculation" form if the 'simple calculation' (their words) provided by IHT400 is insufficient. But in practice IHT400 Calculation's calculation is much simpler than IHT400's calculation.  As it gives the Zero answer.

HMRC really do seem to specialise in designing forms unfit for purpose. 

Btw the suggestions above to use IHT205 btw are now outdated. 205 is no longer in use, unless for deaths before 31st Dec 2021. 

Zanderman

Following up my post above, about form IHT400 insisting, if you follow the instructions at Box 119, on giving a negative IHTax figure, not a zero, if you don't owe IHTax (i.e. you are below the threshold appropriate to the situation). 

But that form "IHT400 Calculation" is more sensible and says to enter zero in that case. The second form should, however, not be necessary if the first form was designed right.

I've now spoken to HMRC IHT helpline and they confirmed that, in these circs, you should ignore the instruction, at Box 119 of multiplying the negative figure by 40% and entering a negative tax liability. Instead you should 'use your common sense' (the HMRC's man words on the phone) and enter zero, despite the clear instruction, at Box 119 to do otherwise. 

So that's what we're doing, ignoring the Box 119 instruction, entering zero and, by doing this, not having to even bother with form "IHT400 calculation".

I do wish HMRC would use some common sense on their forms...