Transfer Nil Rate Band

marineboy99

A basic question please. I am told applying for probate is straightforward but I find some information availble online confusing/contradictory.  
I am executor for my mother's will and I have been told (by a solicitor) that I need to transfer my father's nil rate band by filling in form IHT217. There is no IHT to pay.
When I download this form it says it should not be used for deaths after Jan 2022?
I know it is possible to apply for probate online, is it possible to complete this form through the online process and can I back out of it if I decide I want someone else to do it. Also does any other form need to be completed alongside IHT217.
I am sure once I am on the right track it will be straightforward, just having trouble getting started.
Any help or advice would be appreciated. 

polar_pig

Check if it's an "Excepted Estate":
https://www.gov.uk/valuing-estate-of-someone-who-died/check-type-of-estate
If it's an "Excepted Estate" and the death was after 1/1/2022, then form IHT217 does not apply, so query it with the solicitor.

Keep_pedalling

No IHT return required, and you would be better off not eating money on that solicitor.

polar_pig

It can be straightforward to do yourself online with a single form if the estate is worth less than £325k or up to £650k (including your father's available NRB, such as if all your father's estate went to your mother). If the estate is above this then you need to do tax forms (IHT400 plus associated forms). You generally can get good help on this forum, Furthermore, once started you can still stop and get a professional to do it instead.

I found this helpful to calculate figures:

The Gross, Net and Net qualifying value of the estate for IHT can be taken from the government calculator:

https://www.gov.uk/valuing-estate-of-someone-who-died/estimate-estate-value

Using these figures from the calculator, then manually calculate the Gross and Net value for probate using this:

How to work out the gross value for probate

Work out the gross value of the estate for Inheritance Tax and then subtract the value of all of the following:

• assets that were owned with someone else (‘joint assets’) and that are being passed to the surviving owner
• gifts that were made in the 7 years before they died
• assets that were owned abroad (for example, overseas property or money in foreign bank accounts)
• assets held in a trust

How to work out the net value for probate

Subtract the value of any debts the person who died owed and the cost of the funeral from the gross value for probate.

Do not include debts that were owed jointly with someone else, for example, a mortgage on a joint property.

Taken from here: https://www.gov.uk/applying-for-probate/before-you-apply

marineboy99

Thank you for the helpful responses, it is still strange though. I have provided detailed information to two solicitors (one that drew up my mother's will the other being Affinion's) and both have said independently that IHT217 needs to be completed. To quote one:

'With the short form application, you only get £325,000 worth of allowances by virtue of the nil Rate Band allowance, but to receive the additional £175,000 Residents Nil Rate Band allowance, an additional form needs to be completed. This form is one of the Schedules of the IHT400. An IHT400 is processed by HMRC.So as to circumvent the need for the IHT400, an IHT217 is completed instead to sit alongside the short form application, and so can be dealt with directly by HMCTS.'

They must do this sort of thing daily so I would be surprised if they got something basic like this wrong but I will check with them.

There is definitely no inheritance tax to pay and based on the criteria it is an excepted estate. 

Thanks again for the help.

GoogleMeNow

marineboy99 said:

Thank you for the helpful responses, it is still strange though. I have provided detailed information to two solicitors (one that drew up my mother's will the other being Affinion's) and both have said independently that IHT217 needs to be completed. To quote one:

'With the short form application, you only get £325,000 worth of allowances by virtue of the nil Rate Band allowance, but to receive the additional £175,000 Residents Nil Rate Band allowance, an additional form needs to be completed. This form is one of the Schedules of the IHT400. An IHT400 is processed by HMRC.So as to circumvent the need for the IHT400, an IHT217 is completed instead to sit alongside the short form application, and so can be dealt with directly by HMCTS.'

They must do this sort of thing daily so I would be surprised if they got something basic like this wrong but I will check with them.

There is definitely no inheritance tax to pay and based on the criteria it is an excepted estate. 

Thanks again for the help.

I'm not an expert, but that statement is referring to claiming the Resident's Nil Rate Band allowance, not a Nil Rate Band allowance.   If you use the RNRB, you have to submit the IHT forms to HMRC.  So, the solicitor is correct above.  

NRB = £325,000 per person on death.  So, if your dad pre-deceased your mum, you could use your dad's NRB as well as your mum's, which would be a total of £650,000 before IHT is due.  If £650,000 is a big enough allowance to cover the gross value of the property/savings etc, then there would be no need to use RNRB's, nor would you need to complete any IHT forms for HMRC.

If, however, the gross value of the property/savings etc was in excess of £650,000, you might want to claim the additional £175,000 RNRB allowance for dad and mum, giving a total tax free allowance of £1M.  BUT using RNRB would mean you have to submit the IHT forms to HMRC.  There are some qualifying conditions for applying for the RNRB, so you might like to research this.

I'm sure other posters will be along to explain better than me!