Inheritance Tax And Probate

The probate process and inheritance tax are inextricably linked

. For anyone who passes away you will have to apply for probate either in the form of a 'grant of probate' if there is a Will, or a 'grant of letter of administration' if there is not a Will. When you apply for probate and administer an individual's estate you will also have to investigate inheritance tax and fill in a 'Return of State Information' form.

Not every estate will be required to pay inheritance tax. When an estate is not required to pay inheritance tax the estate is termed an 'excepted estate'. The HMRC website outlines conditions for whether or not an estate is 'excepted'. Most estates are excepted, however regardless of this status or not, every estate it is required to fill in an inheritance tax form. Also there are some estates which DO NOT qualify as excepted estates, but do not need to pay inheritance tax. Again, refer to the government guidelines for further clarification of what constitutes an excepted estate and when inheritance tax is required to be paid.

Which Form Do I Need?

There are different forms to complete depending on where the deceased individual lived and depending on whether the estate is an excepted estate or not.

Excepted Estates

For English, Welsh or Northern Irish residents an IHT205 must be completed for all estates, small or large. For Scottish residents you will need to fill in an C5(SE) for small estates, a small is estate is an estate valued at less than 30,000 or a C5 for all other estates.

It must be noted that there are some estates which will not be required to pay inheritance tax but are not excepted estates. In these situations you will need to complete the same forms that apply to an estate where inheritance tax is due. This will be because a full account of the estate is required.

Estates Where Inheritance Tax Is Due

For England, Northern Ireland and Wales, fill in both an IHT400 and a IHT421 Probate summary. In Scotland you will just need to fill in a C1 (Confirmation with inventory.)

Estates Where The Individual's Permanent Residence Was Abroad

It may be the case that the individual you are administrating for lived abroad but had assets in the UK. If the deceased's permanent residence was abroad and they had assets of 150,000 or less in the UK you will need to fill in an IHT207 if they were a resident of England, Wales or Northern Ireland and a C5 (OUK) if they were a Scottish resident.

It is also possible to transfer an unused inheritance tax threshold. To do this you must fill in a 'transfer unused nil rate band for excepted estates form,' an IHT217. This will mean the estate can qualify as an excepted estate.

All the forms which have been outlined in this article are available for download on the HM Revenue and Customs website, alongside probate forms and instructions of how to complete all forms.

Payment

The inheritance tax itself can also be paid online, or electronically should you desire it to be. You may find this is the easiest way to pay the amount required of you. This is particularly easy if you use telephone or internet banking. Payment is due no more than 6 months after the date the deceased passed away.

by: Paul Howe

POST COMMENT

Septic Tank Cleaning And Pumping Service Providers In Massachusetts Septic Tank Cleaning And Pumping In Pennsylvania Wholesale Womens Shoes And Fit Visit Texas Iron And Metal In Person To View Our Vast Inventory Of Steel Beam And Other Steel Produc Teligistics Provides Professional And Effective Telecom Rfp Teligistics Provides An Easy To Use And Customizable Rfp Template For All Typical Telecom Services Contact Dr. David Altamira Today And Change Your Life With Liposuction In Houston Tomorrow For The Most Accurate And Professional Website Translation Services, Contact The Global Speak Networ Cartier Watches China And Tiawan In The Event It Will Find Worksmen How To Clean And Keep Cute Stuffed Animals Storage Pods And Its Beneficial Features Strength And Determination How To Find Right Mma Fitness And Training Gym