Upgrade to Chrome Upgrade to Firefox Upgrade to Internet Explorer Upgrade to Safari
Legal News | 4.11.21

Remember, remember 1 January

HM Revenue and Customs (HMRC) has announced changes to the probate application process for deaths in England, Wales and Northern Ireland on or after 1 January 2022.

As many readers will know, part of the probate application process involves preparing an inheritance tax account for the estate. Currently, there are two types of inheritance tax account: the shorter Form IHT205 – Return of estate information and the longer Form IHT400 – Inheritance Tax account.

Using Form IHT205 can speed up the probate application process because it is submitted to HM Courts and Tribunals Service (HMCTS) at the same time as the probate application. This is unlike Form IHT400 which has to be submitted to HMRC at least 20 working days before the probate application is submitted to HMCTS.

It is only possible to use Form IHT205 if the estate’s gross value is less than or equal to:
• the nil rate band (currently £325,000);
• twice the nil rate band (currently £650,000) and a claim to transfer 100% of the nil rate band of a predeceased spouse or civil partner accompanies Form IHT205; or
• £1,000,000 and there is no inheritance tax to pay because the deceased left all or the majority of their estate to a surviving spouse or civil partner or a registered charity.

For deaths on or after 1 January 2022, HMRC is relaxing these rules so that, in certain circumstances, estates with a gross value of up to £3,000,000 will be able to use Form IHT205. HMRC believes that this relaxation will mean over 90% of non-taxpaying estates will be able to use Form IHT205, reducing administrative burdens for personal representatives.

However, as regular readers will know, the possible reduction in paperwork is not necessarily a bandwagon to jump on eagerly. It may still be advisable to maintain detailed records of the estate as discussed in our previous newsletter (“To improve is to change”…or is it?).

If you would like help with Form IHT205, Form IHT400 or the probate application process more generally, please contact Wansbroughs’ Private Client team at wealth@wansbroughs.com.


Posted By Our Wills, Tax, Trusts & Probate Team