Inheritance tax allowance query - death before 2021

Joobs89

Hi Forums users,

 Hope you are all well!

Would really appreciate any advice on the scenario below.

My father died in 2017.
The solicitor we used did not fill out the form (IHT217) and send it to HMRC.
IHT217 was the form used for deaths before 2021, to transfer basic tax free allowance to their spouse.
The solicitor did not send the IHT127 form within 2 years of my father’s passing.
The solicitor was engaged in the Probate process for my father. My father’s will was clear that all his assets were to be given wholly and solely to my mother.

Questions:
Is there an alternative form to IHT217, or another method that can be sent to HMRC? To retrospectively resolve this issue?

 I believe my mother’s current IHT allowance is £325,000 (father) plus (mothers) £325,000 = £650,000. Is this the case please?

poppystar

There is no need for anything retrospective. If none of father’s allowance was used then mother has his as well as her own to use. (Possibly also RNRBs if there is a property involved). What is the rough value of the estate? 

I think you may be confusing the two years clause - it is two years from death of remaining spouse. Nothing needs to be done on death of first spouse to activate a transfer of allowance. 

Joobs89

Hi Poppystar,

thanks for the kind and prompt response.

I think the rough total value of estate is £900,000 (money, house/property and small assets).

Keep_pedalling

Back then an IHT return for an exempt  estate would only be needed if he held assets that required probate before they could be released, and it sounds like that was the case. I hope the solicitor did not charge much as there was very little work to do and you really did not need one.

Although you will have to do a full IHT return for your mother, it is not really that difficult so this time think about doing this yourselves.

poppystar

Joobs89 said:

Hi Poppystar,

thanks for the kind and prompt response.

I think the rough total value of estate is £900,000 (money, house/property and small assets).

So, assuming the house is left to direct descendants, she should have her own £325k allowance and that transferred from father £325k plus the £175k RNRB and £175k of transferred RNRB if the house is worth £350k or more. This should cover the estate although you will have to do a full IHT return to get the RNRB allowances. Plenty of help on here if you want to diy it this time rather than spend on a solicitor.