Difference between Value of Estate for Probate and Value of Estate for Inheritance Tax

gonefishing

We are completing Form PA1P probate application and have completed the online IHT checker, which confirm no inheritance tax is due.  

The checker provides the figures needed for completing Question 7.6 of PA1P ie. the Gross and Net Values of the Estate for Inheritance Tax, plus the Net Qualifying Value of the Estate.  However, Question 7.8 asks for Gross and Net Value of the Estate for Probate, neither of which appear to be included on the checker list, unless of course they are the same as the value of the Estate for Inheritance Tax?  The guidance notes for Question 7.8 are less than clear.

Any advice would be much appreciated.

Thank you

shiraz99

I had the same question when I was doing probate for my dad. In my case there was a life interest trust involved that split the property into 2 shares, my mum had passed away a few years back so her 50% share made up the life interest trust. So although IHT was calculated on the full, 100% property value, the probate value would only be based on what formed my Dad's estate, ie, only his 50% share of the value, therefore the probate value and IHT value were different.

The probate values are based solely on what's in the estate of the deceased and therefore doesn't include anything in trusts etc.

gonefishing

Thank you.

As there are no trusts or gifts etc, and only a debt for funeral costs, I guess the values for probate are the same as for IHT?

emma203

Were there any bequests to charities ? For the estate that I'm executor for these meant that the probate value was £15,000 more than the IHT value. 

gonefishing

Thank you, no nothing like that, just a property, bank account / cash isa and a National Savings Income Bond.  We are now pretty sure the figures in this instance are the same, as nothing he had seems to change the IHT figure, so no trusts or donations.  Thanks again.

edtions1971

Hi a quick question I don’t have to pay inheritance tax in section 7.6 of the probate form where it says “net qualifying value of the estate” is the value here 0 as I don’t have to pay inheritance tax? Thanks for your help. 

shiraz99

edtions1971 said:

Hi a quick question I don’t have to pay inheritance tax in section 7.6 of the probate form where it says “net qualifying value of the estate” is the value here 0 as I don’t have to pay inheritance tax? Thanks for your help. 

Have you used the online IHT checker - https://www.gov.uk/valuing-estate-of-someone-who-died/estimate-estate-value

That will give you exactly the figures to go in those boxes. Also, why are you using the form PA1P, you can do this all online.

edtions1971

Hi thanks for your reply, the checker says i have to pay tax on the full amount of £475 but I get resident nil rate band which means the threshold changes from £325000 to £500000 so I’m not sure whether to input the full figure of £475000 or 0 

edtions1971

Sorry typo to confirm the estate value is £475000 not £475

shiraz99

A bit more detail would be helpful.

Is there any transferable, unused nil rate band from a spouse to be applied?

If you want apply RNRB have you completed IHT400 and the accompanying form for RNRB?

Also, it's probably better if you start your own thread on the subject.

HavingAnotherGo

I'm not experienced in probate and this is my first time running through the system. The death in question occured since the rule changes of Jan 2022.

I ran the online IHT checker a few months ago and then again today and as in the original post, nothing there mentions 'Gross and Net Value of the Estate for Probate'.

However, as in the original post, when filing for probate, those two figures are required and my best effort was then to check 'IHTM06031 - General procedural matters: requirement to deliver information'

In IHTM06031 the notes suggest that for the gross value of the estate for probate: "The deceased’s share of jointly owned assets not passing automatically to the surviving joint owner should also be included."

After reading those notes, what I thought might be the case would be that joint assets automatically passing to a surviving spouse, would be deducted from the 'Gross and Net Value of the Estate for Probate'. I also understood separately that they are outside of the scope of the will as they pass by survivorship.

If so, that would lead to a situation where the 'Gross and Net Value of the Estate for Probate' are much lower than the Gross and Net values for IHT.

Am I wrong in my interpretation?

Many thanks