Probate/IHT Confusion

newatc

I thought that I would write some notes to help my OH when I depart. I'm assuming we will still be in IHT territory, my wife would be the only beneficiary so no tax would be due at that time, and my limited knowledge is that she would start the process with the IHT form 400 (with necessary sub forms like gifts given within 7 years) before going on to the Probate form.

However when I read the HMRC guidance it seemed that no IHT forms were necessary because it would be an Excepted Estate because everything is left to spouse and none of the reasons they give to overide that apply (the giving of gifts to our children is not included in that list).

I feel I'm missing something as that seems to benevolent of HMRC.

Help please.

Keep_pedalling

Unless you are the beneficiary of a trust or have substantial overseas assets there will be no need to do an IHT return on the first death, and probate will only be needed if you have assets that can’t be released without it.

newatc

Thanks KP, that makes life so much easier. A christmas bonus 

poseidon1

newatc said:

I thought that I would write some notes to help my OH when I depart. I'm assuming we will still be in IHT territory, my wife would be the only beneficiary so no tax would be due at that time, and my limited knowledge is that she would start the process with the IHT form 400 (with necessary sub forms like gifts given within 7 years) before going on to the Probate form.

However when I read the HMRC guidance it seemed that no IHT forms were necessary because it would be an Excepted Estate because everything is left to spouse and none of the reasons they give to overide that apply (the giving of gifts to our children is not included in that list).

I feel I'm missing something as that seems to benevolent of HMRC.

Help please.

The list would not mention children as such, it does mention chargeable lifetime transfers exceeding £250,000 to anyone ( including children ). 

So if you had made lifetime gifts to children exceeding £250k  ( within previous 7 years ), excepted estate status would not apply. However this is a significant improvement over the pre 2022 position where the gifts threshold was set at a relatively lowly £150,000 - See HMRC manual below. 

https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm06013