Inheritance tax - which forms do I need?

DaveSmith2020

My late father passed way in September 2024, and I am doing the probate forms myself. I've now got to complete some inheritance tax forms, but unsure which I should use.

The house is worth £650K probate value, with a £300K equity release mortgage on it. There is £100K in savings. My mother passed away 5 years ago, and did not use up any of her nil rate band. 

Given the above, I figure I should not be liable for inheritance tax because if you add my fathers nil rate band, the property band and my mothers nil rate band together, I am no where near the threshold for inheritance tax. 

Given the above, what forms should I be completing?

Keep_pedalling

Based on those numbers you don’t need to do an IHT return. His net estate is only £450k which is, as you say, covered by his NRB and the transferable NRB, so you only need to do the probate form.

DaveSmith2020

There are chattels too, but they are not huge. But to get the transferable NRB you have to fill in some forms, I believe. I'm wondering if there are online guides that list quite clearly when I have to fill in what forms.

DaveSmith2020

I just had a look at the government website, and it said this:

What counts as an excepted estate

An estate is usually an excepted estate if any of the following apply:

- its value is below the current Inheritance Tax threshold

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

- the deceased left everything to a spouse or civil partner living in the UK or to a qualifying charity and the estate is worth less than £3 million (search the charity register for registered UK charities)

- the deceased was living permanently outside the UK (a ‘foreign domiciliary’) when they died and the value of their UK assets is under £150,000

So in my case, because the unused threshold is being transferred, there is definitely no inheritance tax to pay and therefore no IHT form to complete. Looks like I just have to do the transferable nil rate band form that applies to my late mother.

Keep_pedalling

No additional documentation all you need to to tick the yes box that asks if you are claiming the unused NRB on the probate form.

DaveSmith2020

Just been looking online to confirm what you have said and it looks like the law changed recently to make things more streamlined. AI was sending me down the wrong route because the training was on old data.

Keep_pedalling

DaveSmith2020 said:

Just been looking online to confirm what you have said and it looks like the law changed recently to make things more streamlined. AI was sending me down the wrong route because the training was on old data.

The changes happened a few years ago, deaths occurring prior to 1st Jan 2022 also needed IHT 205 needed to be completed.