IHT400

Della556

Hello Everyone, 
My relative died in April and I needed to complete a IHT400 as I knew there was a small amount of inheritance tax to pay. 

I completed the form myself with help from this forum and a couple of phone calls to the HMRC helpline. 

I paid the inheritance tax I thought was due and then I received a letter saying I owe a further £10,000 which I will need to pay before I can get Probate.

The Total estate is worth £365k with a mortgage of £25k so is inheritance tax payable on £365k or £340k ( my understanding was it would be £340k)
This £25k mortgage is outstanding on the property and this is where I think the difference has arisen (40% of £25k = £10k) 

So my question is - if a property has a mortgage on it, is IHT calculated before or after a mortgage is deducted as it looks like HMRC have calculated it without taking the mortgage into account?

Keep_pedalling

An estate with £365k of assets and £25k of debts has a net value of £340k which is what the IHT is based on. Either you made an error on the form or HMRC have made an error reading it.

shiraz99

Run your values through the online estate valuation tool and see what you come out with again. I just did the same based on property value being £365K and Mortgage owing of £25K with everything else zero and the Net qualifying estate value for IHT is £340K. Is this what you used when you filled in form IHT400?

If that is the case then the IHT due should have been 40% of £15,000, ie, £6,000.

Do you have a copy or the workings for the IHT400 you sent?

Della556

Thank you both for your replies, I have been over and over my figures again, and I had originally worked out that £6,000 was due and this is the amount I paid.

I phoned the helpline when I received the forms back and they suggested that I write in and explain about the mortgage as it may have been missed it the calculations , but they couldn’t comment on individual cases.
I am confident I did the forms correctly and they are now with a friend who is checking them, 
I just didn’t believe that I could be right and HMRC be wrong when this is the first IHT400 form I have ever done ( or even seen until a few weeks ago)