I am making an application for Grant of Probate. The net value of the estate is £523,000. The deceased had BPR investments totalling £178K. Applying BPR, the general nil-rate band and also residence nil-rate band (using the downsizing provisions in this case), the taxable value of the estate now comes in below the threshold for excepted estates. Looking at the HMRC website, none of the factors which would trigger a full return are present (ie gifts, trusts or foreign assets), but should I still complete forms to claim the reliefs? Or is it the case now that I can just input the figures when going through the online Probate application and don’t have to provide any documentary backup of the reliefs being claimed?
I will likely go through the motions of preparing the IHT forms anyway so there is a paper trail for the future, but it feels wrong to not have to submit anything at all, particularly when you used to have to go to the IHT400 to claim the RNRB! Have I missed something?
Whilst I agree that the HMRC’s guide I have looked at mentions nothing about property which qualifies for BPR (or for that matter APR ) or property eligible for RNRB, I believe that an IHT400 and appropriate supplementary accounta need to be submitted so that HMRC may decide if the estate qualifies for those reliefs.
Regulation 4(7) of the Excepted Estate regulations:
“(7) For the purpose of paragraphs [(2)(d), (3)(d) and (6)]6, sections 104 (business property relief) and 116 (agricultural property relief) of the 1984 Act shall not apply in determining the value transferred by a chargeable transfer.”
All estate are reportable in full unless they come within the excepted criteria (rather than the other way around) and here you appear to be over the threshold.
Also, I’m not sure you can deduct the RNRB for this calculation, in which case you would be caught anyway for an estate over £325k. The net value (assets - liabilities) must be below the “regular” NRB or, if there is a transferable NRB from a predeceased spouse, the sum of the two. In your case, without a TNRB, it would need to be less than £325k.
My understanding is that RNRB is a claimable allowance only which means you have to claim the allowance by completion of the IHT 435. The same applies for the TRNB.
IHTA 1984 s8L provides for the necessity of a claim wrt a “brought-forward allowance”.
However, no claim is necessary wrt the residence nil rate amount (RNRA) itself which applies automatically if the relevant conditions are satisfied [IHTA 1984 s 8E]. I suspect that the belief that a claim is necessary may arise due to the heading on Form IHT 435, namely, " Claim for residence nil rate band (RNRB): Schedule IHT435".
An extract from an HMRC release in 2017 provides “Although you don’t need to make a formal claim for the additional threshold, you’ll need to give details of the amount due and supporting documentation on the IHT return following death…”