Transfer of unused of Nil Rate Band from death of pre-deceased Spouse

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Comments

  • No, you won’t need to complete any IHT forms just the probate forms. You can also ignore any exempt gifts.
  • H657
    H657 Posts: 19 Forumite
    First Anniversary First Post
    Ok thanks, sounds very efficient...
    We had a minor query as HMRC on the phone suggested we still have to fill in IHT402 to transfer mums NRB and also said to mentioned there's £3k gift (total) for this tax year and also £3k (total) backdated from previous tax year, but presume that's just needed if not doing it via the Probate form and since the 2 x £3k is below the annual limits not even needed to be mentioned?
    Did you do the probate via the mentioned PA1P form or is the online Probate application just the same thing and sufficient?
    I filled the PA1P form online (but had printed a paper copy beforehand to work with & populate)
    Have a look at it on the .gov.uk website.
    No gifts to worry about in my Mum’s case.
    Good of HMRC to remind you of the allowances though! I guess if the estate were near the £650k limit, it might be worth considering.
  • Just a quick overview of the situation followed by my question:

    My mother passed in 2014 and made no gifts to anyone so all went to the surviving spouse (My father) so not using any of her Nil Rate Band allowance . My father has recently passed (Dec 2023) and as an executor I'm handling his affairs. His estate is simple in the sense that he didn't own property or shares at time of death but just Savings, ISAs and Bonds (All in the UK) and he has a Will leaving is estate to me and two grandchildren. His estate totals to around 540k exceeding his personal IHT NRB. 
    I've walked carefully through the minefield of IHT rules and have concluded that is estate is an 'Excepted' estate. As he has left a Will, the HMRC site says that I can transfer my mother's NRB allowance by applying for Probate on the PA1P and fill in no other forms.
    This appears to be a simple tick box in section 7.7 of the PA1P but on the face of it requires no proof/evidence.

    My question is:- Has anyone done this and been requested to supply evidence of the pre-deceased spouse affairs or is it all taken on trust?

    Reading the HMRC IHT rules, all sorts of forms needed to be complete for deaths prior to 1st Jan 2022.(Including transferring unused NRB allowance within 2 years) I've spoken to someone at HMRC who sort of confirmed this, but please forgive me for being distrustful as the HMRC person didn't come across as being too professional and I do not want to be hit with a massive fine and penalty.

    Any feedback and experience would be gratefully appreciated. 

    I'm just going thru almost exactly the same circumstances too (father died 2021, mother recently died October. Value of estate around £600,000 so under IHT by using father's NRB). 

    I filled in the online probate forms, ticked box 7.7 to say claiming father's NRB & assumed that would be it as it will be an excepted estate.

    HOWEVER, I have now had an email from HMRC saying I DO need to fill in IHT400 & IHT402 as I am claiming father's NRB against the estate!

    So not as simple as first thought.  You may find shortly you'll get an email asking you to do the same.

    As I understand it, if you are claiming a NRB you do have to fill in the IHT400 & IHT402 & not just the straightforward probate online form.
  • polar_pig
    polar_pig Posts: 80 Forumite
    Name Dropper Photogenic First Post
    edited 29 December 2023 at 3:15AM

    I'm just going thru almost exactly the same circumstances too (father died 2021, mother recently died October. Value of estate around £600,000 so under IHT by using father's NRB). 

    I filled in the online probate forms, ticked box 7.7 to say claiming father's NRB & assumed that would be it as it will be an excepted estate.

    HOWEVER, I have now had an email from HMRC saying I DO need to fill in IHT400 & IHT402 as I am claiming father's NRB against the estate!

    So not as simple as first thought.  You may find shortly you'll get an email asking you to do the same.

    As I understand it, if you are claiming a NRB you do have to fill in the IHT400 & IHT402 & not just the straightforward probate online form.
    Check here:
     
    https://www.gov.uk/guidance/transferring-unused-basic-threshold-for-inheritance-tax#:~:text=You must make a full,when you apply for probate

    and here:

    https://www.gov.uk/valuing-estate-of-someone-who-died/check-type-of-estate

    If after looking at both of these you don't think you need to fill in IHT400 & IHT402, politely ask HMRC why they think you need to fill these in, referring them to the above links.

    Unfortunately they do get things wrong occasionally, also noting that the rules changed for deaths after 1/1/2022.

    I'm in a similar position and have a probate application in at the moment. They've not asked for IHT400/IHT402. However I did get a query stating that I was a "substitute executor" rather than an "executor" and therefore couldn't apply for probate. It turns out they hadn't read the will properly. When I went through the will over the phone with them, clause by clause, they changed their mind.
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