We have a small estate where the deceased assets are all passing to his wife so no IHT is payable and all assets can be closed without a grant.
One month before he passed away, he and his wife put their property into a lifetime trust and continued to live there.
My understanding is that, due to the GROB we will need to complete an IHT400 though this seems excessive for a non taxable estate where a grant is not needed.
Is this correct or is there a way around this?
Many thanks
I had a similar situation a few years ago and I believe the IHT 400 is required.
I administered an estate with PETs exceeding the limits in place with small assets, so Probate not required for them. I contacted HMRC and they confirmed full IHT required.
Maybe the advisers who recommended and arranged the trust might want to contribute to the cost of preparing the IHT400…?
You presumably have an RPT to sort out as well. Hope you have the adviser’s address for service and s/he is regulated and not a person of straw.
SI2004/2543 is clear that an estate is not excepted if part of the value of H’s estate is attributable to property not “passing under his will or intestacy” i.e. a GROB and because it does not contain a QIIP “under a single settlement in which he was entitled to an interest in possession in settled property” i.e. his life interest is in a RPT. (Curiously “interest in possession” is not a defined term and pre-dates QIIPs but I would not care to rely on a NQIIP being permitted). These exclusions are there because HMRC would prefer to know about them.
I fear that it will be cheaper for your client to complete the forms than your trying to negotiate some kind of waiver with HMRC, which may raise suspicion, and if refused the forms will be needed anyway.
Jack Harper