IHT400 - Do I need to complete this?

weehearty98

Hi,

My mother passed away in July 2025 and I'm gathering all the details/values for her estate.  I have had it confirmed by two lawyers that as no financial institutions have asked for 'confirmation' I don't require to apply for it - which was good news.

However, IHT 400 appears is still needed.  Mum gifted her house in 2014 to myself and brother (we are the only children), but subsequently moved into a home in 2023.  At this point, the house was sold and proceeds split.  Her will states everything to me and bro.

Her total estate is well under the NRB but on reading the 'criteria' it looks like I still have to complete IHT400 due to the gifting of house and GROB.  Even if I add the value of the gift it doesn't take the estate value near the NRB - so I am querying whether its really necessary - feels like paperwork to confirm 'zero' IHT to be paid.  I used the IHT calculator as well and that returned a 'zero'.

My question is what are the consequences if IHT400 isn't completed/submitted even with no IHT to pay??

Thanks   

RAS

I assume you are in Scotland but you don't have enough posts yet to edit your thread title.

Where did mum live between between 2014 and 2023?

I'm assuming you dealt with your CGT liabilities when the house sold? Or did you also live there?

weehearty98

Hi - yes, live in Scotland.  Mum lived in her house until 2023.  Yes, we each paid our CGT share on selling the house. 
Thanks

RAS

weehearty98 said:

Hi - yes, live in Scotland.  Mum lived in her house until 2023.  Yes, we each paid our CGT share on selling the house. 
Thanks

So it was a gift with reservation and counts towards her IHT liability. 

When you say the proceeds of the house sale were distributed, to whom?

weehearty98

Thanks - that was my understanding.  Sale proceeds were split between my brother and I by the lawyer once sold.

Even with this counting towards IHT liability the estate is still under the NRB - so I guess I'm thinking - what's the point of completing the IHT400 ???  When nothing is due??

poseidon1

weehearty98 said:

Thanks - that was my understanding.  Sale proceeds were split between my brother and I by the lawyer once sold.

Even with this counting towards IHT liability the estate is still under the NRB - so I guess I'm thinking - what's the point of completing the IHT400 ???  When nothing is due??

You have supplied no valuation figures or clarification on NRBs claimed.

Therefore was  your mother's estate below  £325k ( including house) or £650k assuming she was widowed and deceased husband's NRB was claimed?

If answer was yes to either of above, cannot see a basis for the IHT 400.

However if for some reason you saw fit to claim her £175k residential nil rate band, then this always requires the IHT 400 eventhough no IHT payable.

Keep_pedalling

poseidon1 said:

weehearty98 said:

Thanks - that was my understanding.  Sale proceeds were split between my brother and I by the lawyer once sold.

Even with this counting towards IHT liability the estate is still under the NRB - so I guess I'm thinking - what's the point of completing the IHT400 ???  When nothing is due??

You have supplied no valuation figures or clarification on NRBs claimed.

Therefore was  your mother's estate below  £325k ( including house) or £650k assuming she was widowed and deceased husband's NRB was claimed?

If answer was yes to either of above, cannot see a basis for the IHT 400.

However if for some reason you saw fit to claim her £175k residential nil rate band, then this always requires the IHT 400 eventhough no IHT payable.

As the home was given away back in 2014, if it was required, the RNRB could not be claimed. 

weehearty98

poseidon1 said:

weehearty98 said:

Thanks - that was my understanding.  Sale proceeds were split between my brother and I by the lawyer once sold.

Even with this counting towards IHT liability the estate is still under the NRB - so I guess I'm thinking - what's the point of completing the IHT400 ???  When nothing is due??

You have supplied no valuation figures or clarification on NRBs claimed.

Therefore was  your mother's estate below  £325k ( including house) or £650k assuming she was widowed and deceased husband's NRB was claimed?

If answer was yes to either of above, cannot see a basis for the IHT 400.

However if for some reason you saw fit to claim her £175k residential nil rate band, then this always requires the IHT 400 eventhough no IHT payable.

Thanks - estate is below the NRB without any RNRB.  I wasn’t planning to claim any RNRB 👍🏼

weehearty98

Keep_pedalling said:

poseidon1 said:

weehearty98 said:

Thanks - that was my understanding.  Sale proceeds were split between my brother and I by the lawyer once sold.

Even with this counting towards IHT liability the estate is still under the NRB - so I guess I'm thinking - what's the point of completing the IHT400 ???  When nothing is due??

You have supplied no valuation figures or clarification on NRBs claimed.

Therefore was  your mother's estate below  £325k ( including house) or £650k assuming she was widowed and deceased husband's NRB was claimed?

If answer was yes to either of above, cannot see a basis for the IHT 400.

However if for some reason you saw fit to claim her £175k residential nil rate band, then this always requires the IHT 400 eventhough no IHT payable.

As the home was given away back in 2014, if it was required, the RNRB could not be claimed. 

Thanks - RNRB not required.  However, good to know that it couldn’t be claimed anyway. 👍🏼

probate_slave

Reservation of benefit ended in 2023, so the house is deemed to be a PET gifted in that year. What was its sale value (there is also a maximum £250k gifts condition)?

Strictly you are required to file IHT400 since the estate fails to qualify for low value excepted status. Like you I can't see how it's worthwhile for HMRC to process an IHT400 return in such a case. Was there an avoidance loophole needing to be plugged? However, the conditions are clear at IHTM06012, also on gov.uk and in the legislation below. Nevertheless, and speaking as a law-abiding citizen, I doubt there would be consequences on you for failing to submit the IHT return.

https://www.legislation.gov.uk/uksi/2004/2543/regulation/4/made#:~:text=(2) The,threshold
The oblique reference to the gift with reservation is at para (6)(d) 102A (as amended):
https://www.legislation.gov.uk/ukpga/1999/16/section/104#:~:text=(2),reservation

weehearty98

probate_slave said:

Reservation of benefit ended in 2023, so the house is deemed to be a PET gifted in that year. What was its sale value (there is also a maximum £250k gifts condition)?

Strictly you are required to file IHT400 since the estate fails to qualify for low value excepted status. Like you I can't see how it's worthwhile for HMRC to process an IHT400 return in such a case. Was there an avoidance loophole needing to be plugged? However, the conditions are clear at IHTM06012, also on gov.uk and in the legislation below. Nevertheless, and speaking as a law-abiding citizen, I doubt there would be consequences on you for failing to submit the IHT return

Thanks - appreciate your reply.  The house value is £170k at death and other assets once added estate is £290k - no other gifts/loopholes involved.