IHT400 and property in will trust

Robinette

Although we will be using a solicitor to submit the IHT return, I am trying to keep costs as low as possible by obtaining the values and documentation myself and draft completing the return as best I can.

Something I can't find an answer to is whether I have to include the marital home. My mum was the sole owner, but an interest in possession trust was created on her death with my stepdad as the beneficiary. I suspect it should be included, as I know I have to include a life assurance policy written in trust, but I have no idea where! The value could be included in IHT405, but I can't see where to offset it

Any help would be greatly appreciated. 

RAS

Do you need to submit an IHT form? What's the value of the house and what of other assets? 

poppystar

The full property value needs to be included. What do you mean exactly by ‘offset it’?

If you are collecting all the data do consider doing the whole job rather than using a solicitor - it will be cheaper and almost certainly quicker. 

Keep_pedalling

Anything passing to a spouse whether absolutely or as a life interest is exempt. In this case it is the latter and  the trust is the legal owner your step father is the beneficial owner and for IHT purposes it forms part of his estate.

Unless your mother left more than £325k to people other than her husband then this is an exempt estate and no IHT return will be required.

poppystar

Keep_pedalling said:

Anything passing to a spouse whether absolutely or as a life interest is exempt. In this case it is the latter and  the trust is the legal owner your step father is the beneficial owner and for IHT purposes it forms part of his estate.

Unless your mother left more than £325k to people other than her husband then this is an exempt estate and no IHT return will be required.

Surely that depends on the value of his estate rather than hers? His estate could use her unused allowance plus his giving £650? Assuming as you say nothing was left by mother to people other than her husband. 

Also if OP wanted to claim the mothers RNRB for the property that would surely still be possible eventhough step dad had a life interest??  This would necessitate a full IHT return

Keep_pedalling

poppystar said:

Keep_pedalling said:

Anything passing to a spouse whether absolutely or as a life interest is exempt. In this case it is the latter and  the trust is the legal owner your step father is the beneficial owner and for IHT purposes it forms part of his estate.

Unless your mother left more than £325k to people other than her husband then this is an exempt estate and no IHT return will be required.

Surely that depends on the value of his estate rather than hers? His estate could use her unused allowance plus his giving £650? Assuming as you say nothing was left by mother to people other than her husband. 

Not sure what you are saying here, as he is still alive he does not have an estate, regardless of the size of her estate as long as she has not left more than £325k to anyone else her estate is exempt. 

Also if OP wanted to claim the mothers RNRB for the property that would surely still be possible eventhough step dad had a life interest??  This would necessitate a full IHT return

I believe under these circumstances the TRNRB can be claimed.

poppystar

Keep_pedalling said:

poppystar said:

Keep_pedalling said:

Anything passing to a spouse whether absolutely or as a life interest is exempt. In this case it is the latter and  the trust is the legal owner your step father is the beneficial owner and for IHT purposes it forms part of his estate.

Unless your mother left more than £325k to people other than her husband then this is an exempt estate and no IHT return will be required.

Surely that depends on the value of his estate rather than hers? His estate could use her unused allowance plus his giving £650? Assuming as you say nothing was left by mother to people other than her husband. 

Not sure what you are saying here, as he is still alive he does not have an estate, regardless of the size of her estate as long as she has not left more than £325k to anyone else her estate is exempt. 

Also if OP wanted to claim the mothers RNRB for the property that would surely still be possible eventhough step dad had a life interest??  This would necessitate a full IHT return

I believe under these circumstances the TRNRB can be claimed.

Senior moment! I read it as the mother had died previously leaving the IPDI trust and now the step father had died. 🙄

Robinette

Thanks everyone, but I think I have sussed it. The value goes in box 51 of assets owned outright by the deceased and then it is 'offset' in box 93 as an exemption because it goes to the spouse in the will IIP trust.