I have a query regarding the transfer of an unused nil rate band.
The estate in question is only over the standard nil rate band because deceased had an IPDI in wife’s half share of home. His own free estate on death is under one NRB.
When completing the IHT 217 I note there is a question asking whether deceased was a beneficiary of any trust which of course he was. By answering yes I’m told to abandon the form in favour of an IHT 400 but why does this have to be so complicated? Any way around it or am I missing something?
My understanding is that the deceased was not a ‘beneficiary’ as such, he had an ‘interest’ in a Trust but was not actually a beneficiary of that Trust? As such the IHT 217 question can be answered with a ‘No’ and used.
The question is about the deceased’s spouse and their estate. You only answer Yes if the spouse benefited from a trust in her lifetime. It is not asking whether the deceased benefited from a trust in his.
When the wife dies the answer for her will be yes, and the value potentially liable on her estate. The problem arises in blended marriages where new spouse is a life tenant but the remaindermen are the other spouse’s children. This means the property passes to them, but second spouse’s estate is liable for the IHT.
Patrick I’m a bit confused on what we do for deaths after that date. Is the only option now an online application for small estates? If a paper application is still possible, what are the forms we are completing if not the IHT 205 etc.
I’m a little perplexed by Iain’s comment that whilst the property passes to the step children, the second spouse’s estate is liable for the IHT (on that property?).
If the second spouse has, say, an IPDI, whilst aggregable with her estate for calculating the IHT liability, any such liability will normally be split proportionately between the 2 titles, so that the step children would pay their “share” of the tax. I cannot see where in the posting it is suggested otherwise.
Clearly, if the second spouse’s interest was created by a lifetime settlement (since 21 March 2006) or on death but is not an IPDI (or other qualifying interest in possession referred to in s.49 IHTA 1984), then the trust would be subject to the IHT relevant property regime and, again, no IHT would fall upon the estate of the second spouse.
Paul Saunders FCIB TEP
Independent Trust Consultant
Providing support and advice to fellow professionals
Hi Deborah google probate application and go to the government website whiigives guidance on making paper applications and online ones. It’s not everyone’s cup of tea so if you decide not to proceed consult a STEP member in your area.
Hi Deborah, if my memory serves me right, online applications are supposed to be dealt with within eight weeks whereas paper applications I believe can take 13 weeks. However, if there is a stop put on a case, Because HMCTS has a query about it, it joins another queue and can take Several more weeks. It’s important therefore to get the application right first time.
I assume that the value of the IPDI , ie half share in the house does not exceed £150,000. No-one has mentioned values. If the half share exceeds £150,000 for a death before 1 Jan 2022 then the estate cannot be excepted so IHT 205/217 cannot be used.