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Filling in form IHT400

Can I not do this as I am not authorised under the Legal Services Act 2007?

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I have done a few IHT400s for my family, and they are not rocket science. Now a 30 year+ client has died and the solicitor wants to charge £4500 + VAT for a simple estate which seems extortionate. The three adult children are the executors and beneficiaries.

It seems to me that I am OK to draft the IHT400 for no charge out of friendship and affection, but I am not allowed to charge.

Does the community think that I am absolutely banned from charging? It is offensive to see the solicitor rip them off as I could draft the form for a modest fee, give it to the clients to take to the solicitor and they could haggle for a much lower fee.

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By Paul Crowley
30th Jan 2021 21:04

1 You can do it for free

Charging is the issue as I understand it

2 Is there an issue in writing answers on a piece of paper and giving it to someone?

I was asked by a firm of cr4p solicitors to draft some parts of a sales contract for a business
I charged for it, albeit indirectly when sorting the tax return. I did not consider it to be legal services. If it was then I would have charged four times as much.

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By Hugo Fair
30th Jan 2021 21:16

Not my area really, but https://www.legalservicesboard.org.uk/enquiries/frequently-asked-questio... seems unequivocal. The six specific legal services activities which are called “reserved legal activities” (that only those who are authorised (or those who are exempt) can carry on) includes:
* probate activities - preparing any probate papers for the purposes of the law of England and Wales or in relation to any proceedings in England and Wales.

I guess the missing bit here is context:
a) Does drafting an IHT400 constitute "preparing probate papers"? It is usually a precursor to the probate process, but does that meet the above criteria?
b) To whom are these activities "reserved" (i.e. who are 'authorised' and who are 'exempt')?

On a separate note, why do you say "I could draft the form for a modest fee (and) give it to the clients to take to the solicitor"? The easy way to avoid the ludicrous fees charged by many solicitors is for the executor(s) to deal with it all (IHT through to grant of probate).
Although I didn't charge for it, I completed both my parents' estates after firing the solicitor (who'd managed to run up bills for over £20k without making noticeable progress in a year) - and sorted everything within a couple of months (with a tax-bill over 50% lower than the solicitors had proposed)!

EDIT: Before you ask, I didn't piggy-back off the solicitor's work (which I found to contain lots of errors - of fact and of calcs); I started again from scratch.

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Jane
By Jane Evans
31st Jan 2021 09:27

My understanding is that preparing the IHT is not part of the actual probate process, and therefore not reserved. Accountants deal with tax forms all the time, this is no different and you can charge for it. The reserved probate process is quite a small part of estate administration, and if the estate is simple then the executors may be able to complete that part themselves. There's more information here:

https://www.probateforms.info/is-it-only-solicitors-that-can-do-probate/...'regulated'.

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Replying to Jane Evans:
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By memyself-eye
31st Jan 2021 11:33

Agreed - i've done several, one where I recovered £300K in IHT (ex military wounded in WW2)

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By OldParkAcct
31st Jan 2021 14:28

I don't think the IHT400 is a reserved legal matter. You can assist with preparing the form (and charge a fee) , but it needs to be approved and submitted by the executors.

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By leeanthonyblackshaw
31st Jan 2021 15:02
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By Michael Davies
01st Feb 2021 12:03

What about the 10 year charge calculation ?

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Replying to Michael Davies:
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By Hugo Fair
01st Feb 2021 12:44

Why would there be (there's been no mention of a Trust)?
Anyway the original question was "Does the community think that I am absolutely banned from charging?" - not about how to complete the form or calculate the tax.

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Replying to Hugo Fair:
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By Michael Davies
02nd Feb 2021 10:20

Of course not.The point I am making is how limited is the IHT work we are allowed to undertake.I have been very reluctant to prepare even the ten year disclosure,and literally have to have my arm twisted to do it.It’s usually because the lawyer who set up the trust has gone under the radar,and the client can’t find anyone else.

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By allan613
03rd Feb 2021 09:41

To avoid any problems, ask the client to take you / and your missus out for a meal to an expensive restaurant as a 'Thank you' for your work.
Avoids lots of problems, and you stay good friends.

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Replying to allan613:
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By Tax Dragon
03rd Feb 2021 10:16

Bribery and corruption. The legitimate way to avoid illegitimate payments.

(Except there's no barrier to charging for the work here, nothing illegitimate to avoid. Obviously I'm assuming that any appropriate checks with PI etc are made.)

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By Ajtms
03rd Feb 2021 13:27

There is nothing to prevent a tax advisor or accountant from preparing an IHT form. When I qualified with the ATT, one of the exam papers was all focused on IHT so we are qualified to act and are entitled to charge a fee for it. In fact many firms of solicitors employ me to prepare their IHT forms for them, both IHT100's and IHT400's. We are not allowed to prepare the PA1P Probate Application for a fee, but can give the executor the gross and net estate values to put on it as these will have been calculated as part of the IHT form. We can also prepare estate accounts and period of administration forms. In fact I prepare more period of administration forms than I do SA100's.

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David Ross
By davidross
09th Feb 2021 17:39

Taking this a step further, does anyone have recommendations for IHT400 software? I remember that 10 years ago HMRC had an integrated PDF but these days it is all individual forms, which don't function properly on my Mac, and require the same information to be entered over and over again

I'm only looking for something sensible that would prepare the forms for printing. I checked out the list of recognised suppliers on the HMRC site but am not impressed - if only TaxCalc were in this field! They have a clearly publicised pricing structure but in the IHT/Probate business it is all 'fill in this form and we'll pester you to death ..."

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Replying to davidross:
Jane
By Jane Evans
10th Feb 2021 14:55

I have searched for this as well and not found anything. It would be really useful.

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Replying to davidross:
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By Ajtms
10th Feb 2021 16:56

I too have looked for years, but sadly nothing. I seem to cope OK with the auto-calculation facility in HMRC's pdf form. There are though sometimes problems if you want to amend a particular box as the auto-calculation doesn't always pick up on the change until you delete the total and let it re-calculate.

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Replying to Ajtms:
David Ross
By davidross
25th Feb 2021 18:53
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Replying to davidross:
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By al10
23rd Jul 2021 00:01

Creating IHT software is something I have wanted to do for years after completing various IHT100s for exit charges many years ago.

Out of interest what would you be happy to pay for cloud based software that makes it easy to enter all relevant information then outputs a simple summary and the relevant IHT400 forms - just like we expect from any tax return software?

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