End of Life Interest and IHT100

Trusts Discussion
1

Hi All

Life tenant left life interest to daughter in the 90’s, daughter has now passed away. The property is valued at around £255,000. There may be some other bank accounts in the trust. Daughter’s free estate is only £10,000ish and no probate is required for her estate.

My question is, do we need to do an IHT400 for daughter’s estate so that HMRC know what the “free estate” is worth so that we can the submit an IHT100b. I have read that you only need to submit IHT100 if the value of the trust exceeds 80% of the NRB but what if the trustees require clearance.

I may be getting the complete wrong end of the stick.

The Trustees for the life interest trust are different from the executors / trustees in the daughter’s estate.

Thank you!

2

You need to consider the excepted estate rules to decide if an IHT400 is due. At £255k you are just above the limit of £250k so on the face of it yes an IHT400 will be required alongside (possibly) an IHT100 depending again on the values.

IHTM06020 - Rules about excepted estates: settled property - HMRC internal manual - GOV.UK

3

Thanks Nigel, very helpful!