IHT400 page 13. No will so do we apply probate or letters of administration

longwalks1

As above, helping my step sons with IHT400 on their late fathers estate.  He didn’t leave a will, so on IHT400, Page 13. Box 121. The options are:

are you applying for:
probate 
confirmation 
letters of administration 
letters of administration will will annexed
others (please specify)

are we applying for probate, or letters of administration?

thank you everyone in advance 

Keep_pedalling

Letters of administration. 

Just to check are you certain that an IHT return is required? 

longwalks1

Thanks Keep_Pedalling

We’re filling out IHT400 as there’s a property to be divided between both sons.  I thought you couldn’t apply for probate/letters of administration without having done IHT400?

Or am I wrong?  Happy to be corrected (and avoid the unnecessary paperwork) 

Thanks again 

Keep_pedalling

longwalks1 said:

Thanks Keep_Pedalling

We’re filling out IHT400 as there’s a property to be divided between both sons.  I thought you couldn’t apply for probate/letters of administration without having done IHT400?

Or am I wrong?  Happy to be corrected (and avoid the unnecessary paperwork) 

Thanks again 

If his estate is over his NRB + any transferable NRB from his wife, then yes you will need to claim his residential NRB which does need an IHT return. 

So if he inherited everything from his wife then you don’t need to do an IHT return if it is under £650,001. This also applies if his wife left her share of the house in an immediate post death interest trust.

longwalks1

His estate value is £375k, £325k being the house (no mortgage) and a life insurance policy of approx £50k.  

He had 3 pensions totalling £70k which I understand isn’t part of the estate. One of the 3 pensions require probate to pay out, the other 2 smaller ones are happy to pay out now. 

was going to use £325k IHT allowance and part of his £175k RNRB to pay no inheritance tax.
he wasn’t married, but his long term partner died 7 years ago and left him the house he has now left to his 2 sons. 

Keep_pedalling

longwalks1 said:

His estate value is £375k, £325k being the house (no mortgage) and a life insurance policy of approx £50k.  

He had 3 pensions totalling £70k which I understand isn’t part of the estate. One of the 3 pensions require probate to pay out, the other 2 smaller ones are happy to pay out now. 

was going to use £325k IHT allowance and part of his £175k RNRB to pay no inheritance tax.
he wasn’t married, but his long term partner died 7 years ago and left him the house he has now left to his 2 sons. 

It’s a bit odd that the pension provider is demanding a grant of probate. If the insurance policy was written in trust that also falls out of the estate, have you spoken to the insurance company yet. 

If the insurance is outside his estate you should get away without the need for an IHT return as you won’t need to claim the his RNRB. 

longwalks1

thanks again.
so we could apply for Letters of Administration with form PA1A without the need for IHT400?

Forgive our ignorance, how does HMRC know/trust that we are being truthful with the estate value if we don’t complete IHT400?  (We are, but just wondering) 

poppystar

You sign the Probate application to say you are honest and they believe you  - and I’m sure you are🙂

Keep_pedalling

poppystar said:

You sign the Probate application to say you are honest and they believe you  - and I’m sure you are🙂

HMRC also have visibility of the deceased persons accounts and will be able to see what the house sells for. You would probable get away with gradually disposing of a hoard of cash or gold hidden under the floorboards though. 

longwalks1

Thank you both poppystar and Keep_Pedalling, was just wondering.  As we’ve completed 98% of IHT400 and the sub forms/appendices already, think we’ll submit it anyway.  Guessing the worst HMRC will do is say ‘they didn’t need to submit IHT400’ 

poppystar

longwalks1 said:

Thank you both poppystar and Keep_Pedalling, was just wondering.  As we’ve completed 98% of IHT400 and the sub forms/appendices already, think we’ll submit it anyway.  Guessing the worst HMRC will do is say ‘they didn’t need to submit IHT400’ 

Such a strategy might delay getting Probate or at least cause great confusion (I fear both HMRC and HMCTS are easily confused) . You will get stuck too when you are asked if it is an excepted estate and if you have submitted IHT forms. I suspect, particularly if doing it online, you might not even be able to submit ‘yes’ as an answer to both.