IHT 400 - is it needed?

dragonflyangel

I'm acting as executor for an estate - details as follows:

Married couple own house as tenants in common - house value around £450,000

Wife dies, her will creates a Lifetime Interest Trust enabling the husband to live in the house until his death, when house will pass to daughter.

Wife's savings and chattels valued at around £150,000

Do I need to complete IHT 400 (or any other HMRC forms) for the wife's estate, or can I go straight to the probate application? (Probate needed to claim Premium Bonds) I'm not sure how the value of the trust will affect whether this is an excepted estate or not - I've spent a whole day Googling and I'm still confused!  No inheritance tax is payable so I'm not sure if IHT 400 is relevant or not.

dragonflyangel

Sorry - I forgot to add that wife's savings and chattels pass to daughter in the will, not to husband

lisyloo

I don't believe you need to do IHT400. We had a similar situation recently and went to probate.

Keep_pedalling

With the life interest trust her husband will become the beneficial owner of the whole house so that part of her estate is subject to spousal exemption. The £150k going to her daughter is well below the NRB so you won’t need to do an IHT return.

On his death the whole house falls into his estate for IHT purposes as he is now the beneficial owner.

dragonflyangel

Thank you both for your input - it's much appreciated.