IHT Corrective Account (205 - 400)

Dealt with a straightforward estate (property, savings, possessions) below nil rate band (single man). Post grant / admin period an asset came to light hitherto unknown; a bank account balance in Saudi stemming from a former employment of the deceased. Family had no prior knowledge but balance was sufficient to tip estate into IHT.

Rang HMRC to establish if corrective or full account required; advised corrective only with cheque (including late payment interest as applicable).

Duly completed and submitted with payment in June of this year.

Today received a letter requesting full IHT400.

The full return will detail nothing they have not been told already save for specific account numbers.

Currently on hold to HMRC (28 minutes in…)

Comments please.

John Cartlidge
Campion Solicitors

The notes on the bottom of page 7 of the current IHT205 make it clear that if the addition takes your estate over the threshold then you have to file IHT400, so I think you were misinformed the first time.

Time spent on the phone listening to HMRC’s depressing music could be better spent!

Tim Gibbons

I had a similar issue when I obtained a Grant of Probate last year. The partner of the deceased (genuinely) overlooked various expenditure that her fiance had spent on her house several (six) years ago. The matter became contentious and one of the disappointed beneficiaries threatened to report the executrix and ourselves to HMRC for fraud on the basis that the expenditure should have been treated as a gift. This is in spite of the fact that even treating the expenditure as gifts, and taking into account the value of the estate, no inheritance tax was due. We asked HMRC if they wanted a IHT 400 submitted and somewhat surprisingly they confirmed that an IHT was required. We have subsequently submitted the same but have not received any acknowledgement and the disappointed beneficiary still thinks HMRC will take some form of action against us!!

In the circumstances, I can’t see how you will get round not completing the IHT 400 but it would be refreshing to see common sense applied.

Haroon Rashid
I Will Solicitors Ltd


Was okay; left it on speakerphone (quietly) and did the crossword I hadn’t got around to that morning.

Haroon, as you say, common sense. I note the comment on the 205, but given the only difference in information between that already submitted and that now required (in this case) was the specific bank account numbers it does seem heavy handed. HMRC bod apologised, explained this had been an area of misunderstanding amongst staff and had been clarified; the reason being each sub-form was ‘analysed’ by a different team at HMRC whereas HMRC don’t see 205’s at all. (That’s what the guy said!)

John Cartlidge
Campion Solicitors