We have received a general letter from HMCTS headed “Planned improvements to the probate service” (something devoutly to be wished for).
The first section is headed “Inheritance tax forms” and reads as follows:
"Following the introduction of The Inheritance Tax (Delivery of Accounts) (Excepted Estates) (Amendment) Regulations 2021 I’d like to confirm that you no longer need to submit IHT400 to HMRC when you apply for a grant of probate, if the net and gross values of the estate for probate purposes are nil. There are 2 exceptions to this rule where:
The claim is not unused IHT allowance (residence nil-rate band) of the deceased’s
late spouse or civil partner and the net qualifying value of the estate is more than
£325,000
The claim is unused IHT allowance and the net qualifying value of the estate is more
than £650,000
If either of these exceptions apply, you still need to complete an IHT400 form and amend your online case or paper application accordingly."
I assume that the first sentence is a simple error as if the net and gross values of the estate are nil the exceptions would not apply! I guess that ‘nil’ applies rather to the IHT payable.
Can anyone explain clearly what is meant by examples 1 and 2?
We’d like to remind probate practitioners that for deaths on or after 1 January 2022 you no longer need to submit form IHT205 when you apply for a grant of probate if the estate qualifies as an excepted estate. Guidance on what constitutes an excepted estate can be found at valuing-estate-of-someone-who-died whilst further information on the regulation’s changes can be found at inheritance-tax-reduced-reporting-requirements
If you have any questions on whether an estate is an excepted estate, please contact the IHT helpline on 0300 123 1072