The solicitor for a client reckons form IHT205 should be completed, but I am not convinced that this estate is an excepted estate.
Husband dies with gross estate £390k, £384k net. Of this £347k is left to a discretionary trust and £37k to the surviving spouse. The £347k comes about because the will leaves the trustees a nil rate sum of the maximum that can be passed on without IHT becoming due. This comprises £325k nil rate band plus £22k agricultural property relief.
I feel that the net qualifying value of the estate for the purposes of the excepted estate rules is £347k, not £325k and that consequently this is not an exempt excepted estate. As no other heading of the excepted estate rules can apply, I consider that IHT400 is applicable even though there is no tax to pay ( agricultural relief being claimed on IHT414).
What do readers think?
Replies (5)
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Hi
I sgree with you, if the gross value of the estate is over the available NRBs.
IHT206 confirms the requirements: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/459094/150717_final_version_IHT206_2011_.pdf
(top right of page 4)
I agree IHT400 on the basis .....
use common sense
when a "trust" is used , 205 just aint an option
the link cohen kindly found
sit back and think of the staff at HMRC Nottingham wading through 50 pages of IHT400 , when 48 pages could have been disclosed on the 8 page 205 lol. Their rules not ours.
change the will!
NB comments are made before the new regulations came in!
I had an estate like that and, so that there was maximum flexibility going forward instructed a solicitor who did the necessary deed of appointment that brought the discretionary trust to an end in effect ab initio so that all went to the widow.
I accept that this may not be beneficial in this case as the agricultural relief may get lost as a result but it may be worth considering (if not already done so)