Confirmation and transfer of nil rate band

Dot18

Hi, I'm getting a bit confused about whether I need to complete IHT 400 and 402 or not and would appreciate some advice. I'm filling out the C1 form for my mum's estate and the total estate value comes to approx 520,000 - she left everything to her children.  My dad died in 2009 and left everything to my mum and on his confirmation form the amount submitted then was 197,000. We would therefore seem to be able to both transfer (i) the nil rate band from my dad (and (ii) residence nil rate band so don't think we need to becasue of (i)). 
- Is the estate exempted as it is less thn £650,000 as there is no IHT between husband and wife (or civil partner).
- Or does the fact we need to claim unused nil rate make it unexempted
- Do we need to fill in the additionl forms and if so is the nil rate left £325000 - the full amount - or £325000 minus 197,000?!

Any advice gratefull received.
Many thanks
Dot 

buddy9

Dot18 said:

Hi, I'm getting a bit confused about whether I need to complete IHT 400 and 402 or not and would appreciate some advice. I'm filling out the C1 form for my mum's estate and the total estate value comes to approx 520,000 - she left everything to her children.  My dad died in 2009 and left everything to my mum and on his confirmation form the amount submitted then was 197,000. We would therefore seem to be able to both transfer (i) the nil rate band from my dad (and (ii) residence nil rate band so don't think we need to becasue of (i)). 
- Is the estate exempted as it is less thn £650,000 as there is no IHT between husband and wife (or civil partner).
- Or does the fact we need to claim unused nil rate make it unexempted
- Do we need to fill in the additionl forms and if so is the nil rate left £325000 - the full amount - or £325000 minus 197,000?!

Subject to meeting the other criteria listed here, https://www.gov.uk/valuing-estate-of-someone-who-died/check-type-of-estate this is potentially an excepted estate because NRB of £325k and TNRB of £325k will be available. On that basis IHT400 is not required and you should tick yes to boxes 21 and 22 on form C1.

(Unrenounced legitim entitlement will reduce the amount of TNRB available - your father’s children will have been entitled to one third of his net moveable estate. I assume this is not an issue in this case.)

Dot18

Thanks buddy9. None of the other criteria apply so sounds like we just need C1 and C2 (we will get our solicitor to check the paperwork before it's submitted by trying to get as much done ourselves as possible).

So one thing to check and one other query...
Just to check what you mean by unrenounced legitim entitlement  - I assume that means if any of his estate had gone to his children (us) we would have to take that amount into consideration? It all went to mum as requested in the will - the three of us renounced being executors and mum and solicitor dealt with estate. Everything is now left from mum to the three of us to be divided equally.

One other query - the three of us are executors but as one brother is abroad he wishes to renounce being executor and leave my other brother and myself to deal with the estate. He has signed a document stating this worded in the same way as we did this for dad's will (which you kindly confirmed previously was OK). I therefore haven't listed him in the C1 form and will send a copy of this renouncement with the will as part of the paperwork we submit. Is this correct? Or should I list him and state renounced?

Many thanks again.

buddy9

The declining executor is not listed in the C1 other than in the declaration. There is a similar declaration example in this thread https://forums.moneysavingexpert.com/discussion/4965475/grant-of-confirmation/p50

I needed to mention legitim in the reply for completeness and principally for the benefit of others in a similar situation that may read the post.

The HMRC rules about legitim are a little bit complicated:

• If claimed by a child it will use up nil rate band

• If disclaimed within 2 years of the death, then spouse exemption can apply

• If neither claimed or renounced, then treated as claimed for reducing the spouse exemption

• If disclaimed outwith 2 years, taxable, loses spouse exemption - and also treated as a gift.

Very commonly, legitim is renounced by the children on the first parent’s death.

H657

Your situation mirrors my parents estate (dad died 2015, left everything - £250k - to mum who died Jan 23) with mums final estate being £460k. I didn’t need to fill in any IHT forms as it qualified as an excepted (simple?) estate based on using both mum &dad’s NRB of £650k.

I can’t help with the executor issue as I was sole executor with my sister only named as a replacement.