Confused about excepted estates, which forms to fill in, and the correct process in general

KatieAnna

Hi all,

I'm currently working through the nightmare that is probate on behalf of my mum, who is an executor of my nan's (her mum's) estate.

I've managed to get this far without asking for help and thought I'd finally grasped it, but am now wondering if this should be classed as an excepted estate. I've filled out IHT400 and all the relevant schedules, ready to post. (As far as I can see you have to print and post these forms, right? No way to submit them online?) I really don't want to get it wrong and it's been difficult to get through to the helpline.

In a nutshell:
- My nan died in November 2024. Her husband (my grandad) died in 1990. He did not have a will and everything passed on to her.
- The value of her estate is £560,000: her house was valued by estate agents at £385,000 on average, plus £175,000 money in her current/savings accounts.
- She left a will and her whole estate is being passed on to direct descendants. There were no gifts made in the 7 years prior to her death and she did not re-marry.
- Initially, we thought this would mean that we would need to pay 40% IH tax on £60,000. (i.e. her nil rate band is £500k (£325k + £175k allowance) but after looking into it we realised that we could apply to transfer her husband's unused nil rate residence band of £175k to boost her allowance. We have filled out schedules IHT435 and IHT436. We now believe that we won't need to pay any IHT.
- We received an IHT ref number - I guess we won't need to use this now if we're not liable to pay tax, will that cause any problems?
- When looking over the guidance notes and forms again, I saw this under the list of what makes an estate 'excepted':

"the estate is worth £650,000 or less and any unused threshold is being transferred from a spouse or civil partner who died first"

This criteria is valid to our situation, I think, though most of the others on the list don't apply - by my understanding, you only need to fulfil one criteria.

So, now I'm confused as to whether I actually need to complete form IHT400... or do I need to complete it, but only in part? Do I also need to complete form PA1P, or complete it instead of IHT400? Presumably, I would still need to use the schedules IHT435 and IHT436, as we need to have the transfer of the residence band approved? And if so, which form needs to be sent before the other?!

Thanks for any advice.

Keep_pedalling

You can avoid doing an IHT return by just using her NRB and the transferable NRB from her husband. This gives a total exemption of £650k and no need to use her RNRB. RNRB can only be claimed by completing a full IHT return, so life is much easier if you can avoid it.

All you need to do is apply for probate or letters of administration if she did not make a will.

KatieAnna

Ok, thank you very much. As I have already filled out the IHT forms it doesn’t really matter! But I guess it’s better not to submit them if they’re not relevant to our situation.

I keep getting confused between the NRB and the RNRB.

So, if it is an excepted estate lower than £650,000, we don’t need to fill in form PA1P either and we should just submit the online application form for probate? Won’t we need to submit something to prove eligibility for claiming her spouse’s NRB?

KatieAnna

I’ve been doing more reading - from what I can see, I need to complete the online probate form, plus IHT form 402 and post that one. What I still can’t figure out is if I need to fill in form PA1P or if that is the same as/instead of filling in the online Probate form.

Keep_pedalling

KatieAnna said:

I’ve been doing more reading - from what I can see, I need to complete the online probate form, plus IHT form 402 and post that one. What I still can’t figure out is if I need to fill in form PA1P or if that is the same as/instead of filling in the online Probate form.

No you don’t need to fill out any of the supplementary IHT.