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IHT406 – Bank and building society accounts explained

Use the IHT406 with form IHT400 to give details of any National Savings Investments, Premium Bonds, bank or building society accounts that the deceased held in their sole name that were in credit at the date of death.

What is IHT406?

IHT406 is a form that is used to report the value of the deceased person’s estate and calculate the amount of inheritance tax payable. The form is used as part of the inheritance tax self-assessment process and must be completed by the executor or administrator of the estate. It is a comprehensive document that requires detailed information about the deceased person’s assets, liabilities, and other relevant information.

The value of the estate exceeds the inheritance tax threshold, then the executor or administrator of the estate must complete and submit IHT406 to HM Revenue and Customs (HMRC). The form must be submitted within 12 months of the date of death, and any inheritance tax payable must be paid at the same time.

How is IHT406 completed?

IHT406 is a complex form that requires detailed information about the deceased person’s estate. The form is divided into several sections, each of which requires different information.

Section 1: Personal details

The first section of the form requires the personal details of the deceased person, including their full name, date of birth, and date of death. The section also requires the name and address of the executor or administrator of the estate.

Section 2: Assets and liabilities

The second section of the form requires a detailed list of the deceased person’s assets and liabilities. This includes any property, possessions, and money that they owned, as well as any debts or liabilities that they had.

Assets should be valued at their open market value on the date of death, which is usually the sale price that they would fetch in the open market at that time. For property, a professional valuer may be required to provide an accurate valuation.

Liabilities should be valued at the amount owed on the date of death, including any interest or charges that have accrued.

Section 3: Gifts and exemptions

The third section of the form requires details of any gifts or transfers made by the deceased person in the seven years before their death. This includes gifts to individuals, trusts, or companies.

Gifts made within the last seven years may be subject to inheritance tax if they exceed the annual gift allowance of £3,000. The form also requires details of any exemptions or reliefs that apply to the gifts, such as the spouse exemption or the small gifts exemption.

Section 4: Calculation of inheritance tax

The fourth section of the form is used to calculate the amount of inheritance tax payable on the estate. This is done by deducting any exemptions or reliefs from the value of the estate and applying the appropriate tax rate.

Section 5: Declaration and signature

The final section of the form requires the executor or administrator to declare that the information provided is true and accurate to the best of their knowledge. The section also requires the signature of the executor or administrator, as well as the date that the form was completed.

It is important to note that IHT406 is a legal document, and any inaccuracies or omissions can result in penalties or legal action. It is therefore important to ensure that the form is completed accurately and in full.

Submitting IHT406

Once the form has been completed, it must be submitted to HM Revenue and Customs (HMRC) along with any payment of inheritance tax that is due. The form must be submitted within 12 months of the date of death, although extensions may be granted in certain circumstances.

HMRC will review the form and may request additional information or clarification if required. Once the form has been reviewed, HMRC will issue a notice of assessment, which will confirm the amount of inheritance tax payable.

Overall, IHT406 is a complex form that is used to calculate and report the amount of inheritance tax payable on the estate of a deceased person. The form requires detailed information about the deceased person’s assets, liabilities, and gifts, and must be completed accurately and in full.

If the value of the estate exceeds the inheritance tax threshold, then IHT406 must be completed and submitted to HM Revenue and Customs (HMRC) within 12 months of the date of death. Any inheritance tax payable must also be paid at the same time.

It is important to ensure that IHT406 is completed accurately and in full, as any inaccuracies or omissions can result in penalties or legal action. It is also important to seek professional advice if required, as inheritance tax can be a complex area of law.

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.

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