Grab your copy
Download this help guide in a handy pdf for further reading.
The main purpose of the IHT400 form is to tell HMRC whether there is any Inheritance Tax payable on the estate of someone who has died. When Inheritance Tax is payable, the information you have provided will enable HMRC to calculate how much tax is due to be paid.
This help guide gives an idea of the process which follows completion and submission of the IHT400 form. This can be helpful whether you are submitting the form yourself, or whether you have instructed Roche Legal to do it on your behalf.
If you are early in the process of winding up an estate and determining how much inheritance tax might be due, you may want to take a look at our quick and simple inheritance tax calculator.
Before the IHT400 is submitted
Before your solicitor submits your IHT400 form, they will ensure it is complete and correct. They will also double-check any other documents that are being submitted with it. This will avoid delays caused by incomplete or missing information.
Your solicitor will ensure that:
- All the relevant questions on the IHT400 have been answered fully
- The correct schedules have been completed and attached. Schedules are additional forms used to set out different categories of information: for example, IHT406 is used to provide details of the bank and building society accounts of the person who has died. The IHT400 will indicate which additional schedules you will need to include
- The form is accompanied by a copy of the Will (if the person made one) as well as any codicils to that Will
The weeks following submission of your IHT400
Weeks one and two
Using the information from the IHT400, HMRC will create a record of the assets and debts of your loved one’s estate and note any of the reliefs and exemptions you are applying for. They will then calculate the Inheritance Tax and interest owed by the estate. HMRC will write to us with this calculation and detail the next steps required.
In straightforward cases where the estate has paid enough tax, HMRC will issue a probate summary (called an IHT421) to confirm that all tax which is due at this stage has been paid. However, you should be aware that in some situations the estate may have to pay more tax later.
HMRC aim issue the IHT421 within 10 working days of receiving your IHT400 and/or payment of any Inheritance Tax due – whichever is later. The IHT421 is then used to request the Grant of Representation from the Probate Registry.
The Grant of Representation
The Grant of Representation (which will either be a Grant of Probate or a Grant of Letters of Administration, depending on your circumstances) acts as the legal authority to manage and distribute your loved one’s estate. Our help guide on ‘Estates and Probate’ can provide more information about this part of the estate administration process.
In some cases, HMRC may decide to look at an IHT400 form in more detail before issuing the IHT421. When this happens, HMRC will provide a deadline within which to complete their detailed checks. The process will continue as follows in these situations:
Weeks three to fourteen
It can take up to a further 12 weeks for HMRC to complete their detailed checks. This may involve:
- Conducting a more in-depth compliance check
- Asking the Valuation Office Agency (VOA) or Shares and Asset Valuation (SAV) to check the valuations provided in the IHT400
You will be informed if any of these checks are to take place.
Week fourteen
HMRC’s deadline for resolving their detailed checks will fall within this week. If they do not get in touch with questions within this time, it’s safe to assume they do not have any queries about the information provided in the IHT400.
If they have not already done so, HMRC will usually issue the IHT421 at this stage.
Weeks fifteen to twenty
If HMRC have decided to conduct an in-depth compliance check earlier in the process, they will telephone to explain what is being checked. This should take place within 8 weeks of their letter informing us that the compliance check was going to take place. HMRC might also request more information to be sent to them and will provide a deadline for this. Anything agreed with HMRC in this regard will usually be confirmed by them in writing.
If the VOA or SAV were asked to check valuations in the IHT400 – and they attribute a higher value to any of the assets in the estate – HMRC will provide new calculations by Week 20. HMRC do not normally get in contact with us about the valuations themselves, but they might do if an acceptable valuation cannot be negotiated between them and the relevant agencies.
Week twenty onwards
At this stage, we must inform HMRC about any changes to the values of assets in the estate. We must do this either when those values are final, or when 18 months have passed since the date of death (whichever is earlier).
Before this deadline, we only need to tell HMRC of changes to the value of assets if:
- the changes relate to the value of land, buildings or unlisted shares
- land or shares have been sold at a loss
- assets on which you were paying tax by instalments have been sold
- the increase or decrease in the value of the estate is more than £50,000, before any exemptions or reliefs
- the person who died made a gift with reservation of benefit or had the right to benefit from a trust when they died
- HMRC are carrying out a compliance check on the estate
We will then need to calculate any additional tax and, if possible, place money on account to stop interest from accruing. HMRC will send us their final tax calculations when we tell them about these changes.
Once we believe that all the values in the estate are final and there will be no more changes to report, we will apply to HMRC (using Form IHT30) to issue a Clearance Certificate. Once issued, this confirms that all Inheritance Tax matters are now concluded for the estate.
HMRC will not normally issue a Clearance Certificate if less than a year has passed since the date of death.
How Roche Legal can help
Dealing with legal issues can be confusing and stressful. We understand this, and we’re always on hand to untangle jargon and offer support.
If you need advice on any of the issues raised in this help guide, please don’t hesitate to get in touch. Roche Legal is an award-winning legal practice, offering practical and caring advice.