The IHT402 form within the IHT400 document is used to transfer to the deceased’s estate any unused Inheritance Tax threshold (or ‘nil rate band’) from the previously deceased spouse or civil partner.
Who needs to fill out the IHT402 form?
The executor or administrator of the estate is responsible for filling out the IHT402 form. This is usually the person who has been appointed by the deceased to deal with their estate, or the person who has been appointed by the court if there is no will or executor named in the will.
When does the IHT402 form need to be filled out?
The IHT402 form needs to be filled out and submitted to HMRC within 12 months of the date of death. If the form is not submitted within this timeframe, HMRC may charge interest and penalties.
What information is required for the IHT402 form?
The IHT402 form requires detailed information about the estate, including:
- The value of the estate – this includes all assets such as property, investments, bank accounts, and personal possessions.
- Any gifts made by the deceased in the 7 years prior to their death.
- Any debts or liabilities owed by the deceased.
- Any exemptions or reliefs that may apply, such as business or agricultural property relief.
- Details of any trusts that the deceased may have set up.
- Details of any life insurance policies that the deceased may have had.
The form also requires the executor to provide details about themselves, including their name and address, as well as their relationship to the deceased.
What are the exemptions?
Some of the exemptions and reliefs that may apply include:
- Spouse or civil partner exemption – any assets left to a spouse or civil partner are exempt from Inheritance Tax.
- Business property relief – if the deceased owned a business or shares in a business, this may be eligible for relief from Inheritance Tax.
- Agricultural property relief – if the deceased owned agricultural property, this may be eligible for relief from Inheritance Tax.
- Gifts exemption – small gifts of up to £250 made by the deceased are exempt from Inheritance Tax, as are gifts made to charity.
It is important to note that the rules surrounding Inheritance Tax and the exemptions and reliefs that may apply can be complex, and it is therefore recommended that you seek professional advice if you are unsure about anything.
What happens after the IHT402 form is submitted?
Once the IHT402 form has been submitted to HMRC, they will review the information provided and calculate the amount of Inheritance Tax that needs to be paid.
Are you looking for help to complete the IHT400 form? Give DIY Probate a call on 0116 2795044, and we’ll be happy to help.