There is no requirement for a claim to be made for RNRB. If the conditions for RNRB are met then it is due automatically. Claims are however required for an entitlement to a brought-forward allowance, or for a downsizing addition.
I have made an application for Probate online - an estate of a divorced lady worth £450,000. I have not completed any forms and have just treated it as an excepted estate.
The deceased’s PRs must make a claim for a downsizing addition [IHTA 1984 s 8FA(7); 8FB(6)].
A claim must also be made to claim a transfer of the RNRB [IHTA 1984 ss 8L & 8B(1)].
Form IHT402
There is no provision (I believe) explicitly stating the need for a claim to be lodged for an estate to be entitled to a RNRB [IHTA 1984 s8D]. However, Form IHT435 appears to require completion.
will it just be form IHT 435 or 400 as well! Hopefully not.
Now that I have applied online could I just ask the client to sign an IHT 435, send it to HMRC presumably and ask them to link it to my online probate application
My understanding is that if you use an IHT 435 or 402 you must submit an IHT 400, as HMRC And not HMCTS decides if the claim is acceptable. However, others may think differently.
So I just don’t understand this statement then if that is the case Patrick?
There is no requirement for a claim to be made for RNRB. If the conditions for RNRB are met then it is due automatically. Claims are however required for an entitlement to a brought-forward allowance, or for a downsizing addition.
As IHT 435 and 436 are supplementary accounts to IHT400 and since these must be completed in order to claim appropriate reliefs, I can’t see how this can be done without completing a 400 as of course, they require an IHT reference on them and be submitted to HMRC. However, if someone else on this forum can say otherwise, and provide support for their view, naturally, I would be delighted, as no one wants to have to complete the 400, unless one has to!
It is true that IHTA 1984 does not ordain a claim but I fail to see how you can obtain RNRB without telling HMRC. That is why Box 29a on page 5 of IHT 400 asks for Yes or No and if Yes use Schedule IHT435. Similarly Boxes 29b for TRNRB and 29c for TRNB.
Page 10 of IHT 400 Notes makes all that clear. So I agree with Patrick.
You should give details of the amount you want to use and any supporting information on the IHT400 account form and the form IHT435."
Form IHT205 page 4 makes it clear that all the assets in Box 11 including the deceased’s residence in 11.8 are “the gross value for each item before deduction of any exemption or reliefs” confirmed by the side-note to Box D.
Form PAP1 requires a form IHT205, 207 or 217. (IHT217 was a claim for TNRB for excepted estates now IHT402), Section 7’s Q&As presume that you have filled in either IHT 400 or 205 as it ask for figures to be copied from them.
How are you hoping to be given relief if the gross value of the residence is returned on either of those forms without “claiming” RNRB? Your Box D gross value on IHT205 is presumably £450k so the estate will pay tax at 40% on £125k. This information indicates that the estate is not excepted.
Jack Harper
Deborah, I think it is confusing which is not helped by commentary when the RNRB was introduced that it applied automatically if the relevant conditions were satisfied. In particular given (as per my post above) that formal claims are necessary for a downsizing addition and RNRB transfer per the legislation.
However, despite the lack of specific legislation requiring no claim for a RNRB, it is clear that pragmatically speaking some form of communication with HMRC is necessary if the RNRB is to used to reduce the deceased’s estate.
I’m not sure your estate is a low value excepted estate. Note also the changes to excepted estates when deceased died on or after 1 January 2022.
Just had a quick look at HMRC IHT Manual para 46021:
“As is explained at IHTM46004 there is no requirement to claim RNRB. It is due automatically if the conditions are met. A claim is, however, required for a brought-forward allowance (IHTM46040) or a downsizing addition (IHTM46050).”
I agree with Patrick. As he said, as the schedules are supplementary schedules to IHT400, they cannot be submitted on their own and mut be submitted with the IHT400 and all other relevant schedules.
Isn’t the issue that the estate is not excepted so an IHT return is needed anyway. I believe you ignore the RNRB when considering if the estate is excepted. As she was divorced I assume there is no TNRB coming forward.
Just commenting further I agree that the RNRB is automatic so my take on the IHT435 is simply that you are evidencing to HMRC that you qualify for it rather than it being a claim.
The modification to SI 2004/2543 re the definition of “IHT threshold” [Reg 5A] made no reference to the RNRB and there appears to be no reference to the RNRB or TRNRB elsewhere in the Regs.
It therefore seems clear the RNRB/TRNRB is irrelevant to the the excepted estates regs.
The penultimate paragraph of IHT, M46004 seems to imply that one is looking at in a case where an IHT 400 is being submitted. Not sure, therefore, if the information given earlier in the document applies to non-IHT 400 cases.
Malcolm, I think that you have identified the source of the issue.
I agree that the law requires no formal claim to be made. But the 400 requires specified information in 435.
The 205 requires Gross Values: IHTM06012. This is what is compared to the IHT Threshold.
I cannot see how HMRC can verify an entitlement to RNRB without detailed information, hence 435, and in an excepted estate the sole information sought, that the deceased had a residence and its gross value, is not sufficient. Box D is a gross total which presumably a computer intially checks against the IHT Threshold amount prompting a query.
I only jest about their (impliedly asserted) metaphysical powers in judging a taxpayer’s “purpose” and “intention”
I agree with Nigel on both counts. HMRC are not using the word “claim” appropriately. But that’s all right because they own the tax system and we are just tolerated as optional extras. (Droit de Seigneur. This is also the official approach to statutory interpretation).
Compare s179 (2A), “loss” on sale of shares relief, and 191(1A), “loss” on sale of land relief. A claim is obviously required here because the qualifying event will self-evidently crystallise, if at all, after the date of death. Each is a claim properly so called whereas in IHTM40621 it is a claim not properly so called (or misleading, unhelpful and wrong, as witness the confusion among the learned residents of this Forum).
The mystery of the Form IHT205 that did not bark in the night is solved: you do not deduct RNRB in determining whether the estate is excepted.