My client is the personal representative and sole beneficiary of his mums estate, she left a a valid will. His brother died before his mum died and did not leave a will. Under the intestacy rules his estate would have passed to his mum as he was not married and had no children and the dad predeceased. We are preparing a Deed of Variation to redirect the deceased brothers estate to the surviving brother so that it falls outside of the now deceased mum’s estate for IHT reasons. My question is should a HMRC Section 142 Declaration be filed along with the IHT400 form for the mums estate to refer to the Deed of variation? We are within the 2 year DOD time period on both passings.
The relevant s 142 declaration is always included within the deed of variation.
The IHT400 for mum’s estate will ask about any DOV regarding mum’s estate. You don’t therefore need to refer to the DOV regarding brother’s estate (and should not include any assets of his estate in mum’s estate) nevertheless I suggest you make reference to it in the ‘additional information’ section of the IHT400 (and explain that the assets of the son’s estate are not included in the return for mother’s estate).
Paul Davies
Clarke Willmott LLP
Thank you Paul, as always appreciate your time in replying.
Kind regards
Shaun
The variation is of the brother’s estate and the proper party to it is the administrator of the mother’s estate: IHTM35042.
The executed document must itself contain a statement that s142 is to apply: s142(2). S.218A requires it to be submitted to HMRC within 6 months of execution date but only if it results in additional tax payable.
HMRC cannot require the form IOV2 to be used and sent to them with a copy of the instrument but there is a strong implication that this will help them to accept the validity of the instrument and confirm that, an unusual indulgence of the taxpayer’s need for certainty: IHTM35088-9.
There is no indication in the Manual or the form that this is only offered when s218A applies. The form most helpfully sets out an example of an acceptable statement and furnishes a reminder that it needs to specify for which tax it is to apply or for both. If the latter one submission suffices. It does not state where to send the form but that will depend on if and how HMRC has been already engaged.
As regards mum’s estate Paul has said the necessary and I would only add that HMRC will want to work both estates together.
Jack Harper