DIY Guide to Inheritance Tax &

Probate 2024-25

By Tributum Auxillium

All profits from this book will be donated to a suitable

bereavement charity
About the Author

The author is Chartered Accountant who worked in Corporate Audit and Tax for
KPMG, the global financial firm.
He has recently completed inheritance tax and probate as the Executor of an
Estate. When he approached this task he was surprised that while there were a
number of well written guidebooks published on this subject, they were quite old,
rendering some of their information out of date or unusable. The motivation for
this guidebook was therefore to bring the information on inheritance tax and
Probate up to date, and provide a helpful guide to people working in a difficult
situation.
All profits from the sale of this book will be donated to suitable bereavement
charity.
Introduction

If you are reading this guidebook there is every chance you have lost someone
close to you, or are acting on behalf of such a person. At a time of personal
grief, when people may be feeling at an emotional low point, they can find
themselves called to manage the financial affairs of an Estate, something for
which they may not feel they have the time, energy, or ability to take on. Terms
like ‘inheritance tax’ and ‘Probate’ may be unfamiliar, perhaps even somewhat
intimidating, raising thoughts of lengthy forms, financial management, and
opaque legal terminology, all of which are very much part of the process, but
that does not mean they cannot be overcome with the necessary personal
qualities.
In such circumstances many people will look to turn the matter over to a
financial professional or a lawyer to take on the responsibility for them. No
criticism is implied of such choice and no doubt it is the right choice for many
people, though it comes with a significant financial costs, and potentially an
extended time to complete the work.
The financial cost alone may be enough to push some people to consider taking
on the work themselves, while others are by nature independent and would
rather do things for themselves if possible. The fact you are reading this book
suggests you have at least some interest in taking on
While there are some aspects of Estate management that will almost certainly
require professional help, such as the sale of a property, the inheritance tax and
Probate aspects of the Estate have been designed by the Government to allow
them to be completed by the individual, without the need for paid helpers. It is to
people who wish to take on this responsibility themselves that this guidebook is
addressed.
The complexity of the work involved increases with the financial value of the
Estate and the assets it comprises. At the lower end of the scale, an Estate
comprising a small amount of cash only should not require any inheritance tax
work and it may even be possible to avoid the need for Probate if the institutions
holding the money have set a high enough threshold. At the other end of the
scale, a multi-million pound Estate comprised of cash, shares, multiple
properties, some in the UK, some abroad, and a share of a business venture in
Mongolia, may require a great deal of effort, and still result in a large tax bill.
There comes a point where the complexity of the Estate and size of the likely tax
bill make the employment of financial professional justified. There are tax
professionals who may understand the finer points of the relevant legislation well
enough to argue the case for a lower tax bill. Where this point lies will vary with
the ability and energies of the individual, and as such must be a personal
decision.
My approach to this guidebook has been to touch on all the aspects of
inheritance tax that HMRC list in their core form (IHT 400 – more on this later),
but inevitably this has to be a fairly superficial level because often the devil is in
the detail, and this means that bespoke tax advice that covers every possible
situation is not practical. Moreover, there are aspects of inheritance tax that
may require very niche and specialist advice, a depth of knowledge that can only
be maintained by regular active work in this specialist area. This means there
will be areas where my own knowledge and experience is not sufficient to
comment, and in such cases I will advise that specialist professional advice
should at least be contemplated.
Inheritance tax and Probate are typically considered together in guidebooks
because the two processes are potentially somewhat intertwined, certainly both
only arise when dealing the Estate of someone who has died. The two processes
will be discussed in more detail later, but for the purposes of introduction it is
worth noting that inheritance tax and Probate are discrete processes. Each has
its own separate forms and rules, and each is administered by different
Government department, HMRC (His Majesties Revenue and Customs) in the
case on inheritance tax, and HMCTS (His Majesties Courts and Tribunals Service)
in the case of Probate. Depending on the nature of the Estate, it may be
necessary to deal with neither, just one, or both of these. This guidebook has
been written to cover the scenario of needing to engage with both.
Who This Book is For

While this book may be of interest to anyone seeking to learn more about the
management of inheritance tax and probate, it has primarily been written for the
Executor of the estate of the person who has died. While there can be, and often
is, more than one Executor, for simplicity of writing the singular term will be used
through this guide.
The Executor is the person the deceased has named in their Will. It is a big
responsibility that brings with it a legal responsibility to act in accordance with
the wishes of the deceased for financial arrangements that have been recorded
in the Will or any legally binding codicils (additional requests added on to the
original Will).
The Executor can be open to legal action from individuals or organisations who
believe they have not received the money they are owed. Similarly, if there any
problems with the inheritance tax work, it is the Executor who is on the hook for
any mistakes that mean not enough tax has been paid.
The reason this guide is aimed at the Executor is because this is the person the
Government departments who deal with inheritance tax and probate will expect
to deal with.
Qualities need to be a good Executor:
 Honesty. You will potentially be managing large sums of money owed to
other people. It’s no sin to be tempted, but it is a sin to succumb to
temptation. If you think you lack the honesty for the role, do everyone a
favour and pass the role over to someone else.
 Industrious and hard working. The scale of the task varies with the
complexity and value of the estate but this is potentially a demanding role
in terms of gathering information and dealing with the necessary
organisations.
 Organised. There may be a lot of information to keep track of, much of
which may have to be recorded to provide an evidence trail for the tax
authorities and the beneficiaries.
 Persistent. You may be dealing with people and organisations who need
to be chased to provide the necessary information.
 Reasonably good with numbers. The maths involved in this process
are not hard at all. You were probably taught the necessary maths in
primary school, but there can be a lot of numbers to manage, and you
may have to talk to organisations about these numbers. Some people love
numbers, others struggle. If you struggle with numbers it may be worth
paying a professional to help.
 Good with detail. Depending on the size and complexity of the estate,
there may be many forms to be completed with lots of questions. The
process rewards attention to detail and punishes mistakes. If the forms are
not completed correctly you will either have to do them again, creating a
time delay and adding to your stress levels, or you may open yourself to
legal challenge. If you have a history of being sloppy with your written
 work it could be a good idea to pay a professional to help with this
process.
If there is no Will, the Will has been poorly constructed, perhaps not even naming
an Executor, or the named Executors decline the role, whoever is managing the
estate will need to apply for Letters of Administration.
As you might imagine, there are rules about who can obtain the Letters of
Administration. We don’t want a system where anyone and everyone can apply
to manage the financial affairs of the estate. You can apply for Letters of
Administration if:
 You have been left the entire estate in the Will, provided there are no
Executors acting.
 If there is no Will, an order or priority applies based on the relationship to
the deceased as follows – first, the wife or civil partner; second, child;
third, grandchild; fourth, parent; fifth, nephew or niece; another relative.
The process of obtaining Letters of Administration is given at
www.gov.uk/government/publications/apply-for-probate-if-there-is-not-a-will
The Letters of Administration give broadly the same powers as an Executor, so
for simplicity the term ‘Executor’ will be used going forwards.
What is Inheritance Tax and Probate?

So far we have touched on the terms ‘Inheritance Tax’ and ‘Probate’ but not yet
defined them.
When someone dies, if they have left a Will, it should name one of more
Executors. While the Executor has a number of formal roles, for the purposes of
this guide, their most important job is to manage the Estate of the person who
has died.
The Estate comprises all the assets and liabilities of the person who has died.
The assets have a positive financial value to the Estate, and may include:
 cash in bank accounts
 cash in physical form (under the mattress, in a safe, down the back of the
sofa, or wherever it may be found).
 Bonds, including Premium Bonds and other savings products
 Insurance products such as life insurance or pension policies, especially if
these will continue to pay out to a relative after the death
 Shares
 Paintings, antiques, jewellery, machinery
 Vehicles
 Property, including the obvious things like flats, bungalows, and houses,
but could include things like beach huts.
 Land
 Full or part ownership of a business.
 Anything else of financial value
The liabilities have a negative financial value to the Estate any may include:
 Mortgage or other debt secured on property owned by the person who
died
 Personal loans
 Leasing or HP obligations
 Unpaid bills (e.g. utility companies)
The Executor must become something of a detective to find all the relevant
documents and speak to the relevant people to build up this financial picture of
the Estate. Once the assets and liability totals have been calculated, the
liabilities are deducted from the assets to give the value of the Estate.
Inheritance Tax is then applied at 40% on the value of the Estate, payable to
His Majesty’s Revenue & Customs (HMRC). The good news is that various
exemptions and deductions are available that, depending on the amounts
involved, will either reduce the tax bill, eliminate it completely, or even mean
that Inheritance Tax work can be ignored, with no contact with HMRC required at
all. The detail of this is explored in the later chapter.
The Executor is called upon to manage the Estate without being the legal owner
of the assets and liabilities. Quite rightly, banks and other organisations will not
wish to give out personal information or allow anyone to move money or assets
around just because they say they are an Executor. In order to provide the
Executors with the legal powers they need to act on behalf of the Estate, the
Government has created a system called Probate.
While Inheritance Tax is managed by HMRC, Probate is managed by a different
Government department, His Majesty’s Courts and Tribunal Service (HMCTS).
This means two different application processes need to be completed on different
Government systems. They are interlinked though because HMCTS will not issue
the Grant of Probate if there is outstanding Inheritance Tax to HMRC.
The Grant of Probate is a very powerful tool for the Executor as it will allow them
to perform actions such as taking control of bank accounts and selling property. If
the Estate includes property or large amounts of cash in bank accounts the
Executors will almost certainly not be able to complete their work until Probate
has been granted.
The purpose of this guide is to explore the detail of these two, Inheritance Tax
and Probate, but first it is useful to note the actions to take following the death,
some of which will be need to be completed before the Inheritance Tax and
Probate can be started.
Registering the Death

The death of someone can be difficult to cope with for many reasons. If you are
reading this guide, it may be that you, like many others, find taking practical
steps to manage the situation to be a welcome distraction, or else provide a
feeling of moving forwards. As this is a practical guide, I will try and avoid text
that attempts to tug at the heart strings, but I hope the reader will find no
disrespect in what can obviously be a deeply emotionally charged time.
In a sense, the people involved in these arrangements are called upon to be at
their best when things are at their worst. Friends and families can fracture under
the intense pressure the death and subsequent arrangements bring. These
fractures can last a lifetime, destroying relationships, and it is hard to imagine
that is what the deceased would have wanted. Though the challenge may be
extreme, the more people can contain the negativity of the time and seek
positive outcomes, the better things will likely be in the long run.
The Inheritance Tax and Probate work that is to come can be demanding in terms
of time and energy, so the more people helping with good will towards each
other, the better the likely outcome.
The first actions depend on where the person has died. If they have died in
hospital, in practical terms, it can make things easier because there will be a
doctor present to confirm the cause of death. The hospital will usually have a
mortuary where the body can be kept until arrangements are made with an
undertaker.
If the person died at home, a doctor should be called to confirm the cause of
death. Confirm with the doctor which Registry Office they are sending the
medical certificate to and how long they expect it to take to arrive. An
undertaker will then need to take the body to a mortuary where it can be kept
safe until the funeral. It may the be the undertaker has already been specified in
the Will.
If you need help finding the appropriate Registry Office, the Government offers a
search based on post code – see www.gov.uk/register-offices.
In order to register the death you will need to be one of the following:
 A relative who either lives nearby or was present at or near the time of
death.
 Present at the death, even if you are not a relative.
 A person in authority is the building where the death took place (e.g.
owner of a nursing home).
 Lived in a building with the deceased.
 The person arranging the funeral.
 The police (if the body is unidentified).
Once an appointment has been made with the Registrar you will need to bring
the medical certificate that details the cause of death (unless already provided).
This is the crucial document, however additional useful information of the
deceased includes the Birth Certificate, proof of name (e.g. passport) and
address (e.g. utility bill), National Insurance Number.
The interview will normally take 30 – 45 minutes and include questions about the
occupation, the town or county where they were born, surviving partners, and
Government pensions and benefits.
For the latter, the Registrar should provide details of the Government’s ‘Tell Us
Once’ service that allows most Government departments to be notified through
one online form. If not, the service can be accessed at www.gov.uk/after-a-
death/organisations-you-need-to-contact-and-tell-us-once.
Provided the Registrar is satisfied with the information provided, they will provide
you with the Death Certificate and ask if you would like additional copies. The
answer is almost certainly ‘yes’ because a piece of paper is easy to lose and you
will potentially need multiple copies to deal with different organisations through
the Inheritance Tax and Probate process. You can get more copies from the
Registrar later, but it will be more time consuming and expensive. The more
useful question is probably ‘how many copies are enough?’ I suggest 4 as a
minimum but if you know for sure that the deceased has accounts with many
different financial organisations, then you might need more. If you can afford it, it
probably makes sense to get a couple more than you think you will need to avoid
the hassle of having to get more later. At the time of writing the cost £11 per
copy. Note that most, if not all, of the organisations you will deal with later in this
process will not accept photocopies of the Death Certificate.
As we shall see later, the Death Certificate is a powerful document. There are
certain steps in the process that cannot be started without this documents, and
it may allow you access to some of the funds of the deceased. This means you
don’t want it falling into the wrong hands. Keep it safe.
The Registrar will also give you a Certificate of Burial or Cremation, also known at
the ‘Green Form’. The funeral director will need this in order to proceed, so this is
another document to keep safe.
Financial Detective Work

The next logical step after registering the death would be the funeral
arrangements, however since the funeral can potentially involve a big financial
cost, it is worth taking a brief detour to consider the financial arrangement of the
deceased.
Some people take steps to pay for their funeral arrangements in advance. In
these circumstances one would hope the deceased has briefed the relevant
people in advance, but life can sometimes be messy, mistakes can be made, and
things can be forgotten.
Once the death has been registered, if you can face it, and perhaps not everyone
can, it will likely be useful to go through any paperwork of the deceased that you
have access to. The following items will be of particular interest and make life
much easier if you can find them:
 The Will
 Codicils to the Will – additional instructions to the original Will that have
been properly signed and witnessed.
 Funeral plans or preferred funeral arrangements
 Bank or Building Society accounts
 Life insurance policies
 Share certificates (note these may also be held online)
 Savings bonds
 Property deeds and mortgage documents
 Details of significant building or electrical works
 Warranties for any building work, boilers, electrical items
 Utility bills
 Debts
Much of this information will come into play later in the process, but for the
present time it is useful to note that banks and building societies will usually
have a policy of paying the funeral costs from savings of the deceased, provided
there is enough money in the account, and you are in possession of the Death
Certificate.
Each financial organisation has their own policy and ways of being contacted.
Because this information can change at short notice it is as well to Google
‘Bereavement Service of [name of bank or building society] to obtain the latest
information. If there is a branch near by it is usually possible to begin the work
there, though they will usually refer you on to their central Bereavement Service
to complete the process. If there is no branch nearby, there should be a
telephone service option.
This process will likely be much smoother if you are named as an Executor in the
Will, and can show the Will as evidence, in addition to the detective work. If you
are not the Executor, you may have to leave this work to the person who is, or
else speak to the organisation to find out how their process works.
The average funeral cost is about £5,000, but can be much more, so it can be
very useful for cash flow purposes to have this paid from the estate in advance.
The Executor can alternatively pay it themselves, keep a receipt, and then pay
themselves back out of the estate at a later date.
The funeral arrangements themselves will likely take up the time and energy of
those involved, and it is probably as well to switch off from financial and legal
arrangement through this time. Once the funeral is complete and you feel you
have the necessary energy to return to the process, it will be time to think about
inheritance tax.
Inheritance Tax Preparation

The maths of inheritance tax are not hard, but the rules are somewhat complex,
and the form filling may be extensive, so it pays to take your time and get the
details correct.

Valuing the Estate

Your first task is to value the estate. To do this you need to create a set of simple
accounts. While this might sound a little intimidating for those with no financial
training, in practice it is not hard for those Executors with the necessary qualities
specified earlier.
To recap, the Estate comprises all the assets and liabilities of the person who has
died. The assets have a positive financial value to the Estate, and may include:
 cash in bank accounts
 cash in physical form (under the mattress, in a safe, down the back of the
sofa, or wherever it may be.
 Bonds, including Premium Bonds and other savings products
 Insurance products such as life insurance or pension policies, especially if
these will continue to pay out to a relative after the death
 Shares
 Paintings, antiques, jewellery, machinery
 Vehicles
 Property, including the obvious things like flats, bungalows, and houses,
but could include things like beach huts.
 Land
 Full or part ownership of a business.
 Anything else of financial value
The liabilities have a negative financial value to the Estate any may include:
 Mortgage or other debt secured on property owned by the person who
died
 Personal loans
 Leasing or HP obligations
 Unpaid bills
You need create a simple spreadsheet with assets in one column and liabilities in
the other. Subtracting the liabilities from the assets will give you a working value
of the estate that you can use for inheritance tax purposes. You may be called on
to provide this set of accounts as evidence later, so make sure you keep a
record, paper as well as computer.
Some of these valuations will be easier than others. At the easier end bank
accounts and bonds will have a value stated, though beware that unpaid interest
may also have to be factored in.
Other items may need a professional valuation. Estate agents will usually value a
property for free. Best practice is to get two or three valuations from different
agents. This is less important if the Executor is also the beneficiary. If you are
acting for other beneficiaries they may potentially question your valuation and it
is easier to defend with multiple professional valuations.
Other items such as jewellery, painting, and antiques may also need professional
valuation. It may be that this service has to be paid for. If so the Executor should
keep receipts to claim the costs back from the estate.
There is nothing to stop the Executor making their valuation of the assets
without professional help. Be aware that if you to do this you are potentially
opening yourself to legal challenge and financial penalties if your valuation is
significantly below the value actually realised or confirmed later. It’s likely worth
the upfront time and effort to get the professional valuation, which of course
should be kept as a record.
The most volatile of the assets listed above are shares quoted on the stock
market, the value of which can change day by day, or even minute by minute.
How on earth is the hapless Executor to provide a valuation for an asset that can
change so quickly? The answer is that you use the value on the day the person
died. For this reason it can be useful to buy a newspaper that provides share
prices (not all do) on the date of death. Failing this, there are many online
resources that track share price over time. To work out the value you need to
multiply the share value (usually a few pounds or pence) by the number of
shares held.
Further useful guidance is provided at www.gov.uk/valuing-stocks-and-shares-for-
inheritance-tax.
Years ago most provide individuals held shares in paper certificate form. Over the
years it has become more expensive and difficult to deal in paper certificates, so
many investors have moved to online ‘nominee’ accounts where the shares are
held by a company on behalf of the individual. If this is the case there may be no
paper record of what the deceased held and you will need to contact the
company in the same you would contact a bank.
If there are life insurance policies or similar financial products, contact the
company directly to confirm the value. If you are lucky there may be document
already available that specify exactly what you need to do. If not, it may be a
case of a bit of detective work and telephone calls to the helplines of the
organisation to track down the relevant details and any supporting evidence that
is needed.

Dealing with Debt and Liabilities

If you are lucky, the estate has no debt to settle, except perhaps a few
outstanding utility bills. If there is debt to manage tread carefully because the
Executor may be personally liable for any mismanagement.
As with the assets, some detective work is required, going through paperwork
and speaking to people close to the deceased to find out if they owe money to
people or organisations. It is very likely that at least a small amount of money
will be owed to the utility companies (water, electricity, gas etc).
Each organisation will have their own policy for dealing with money owed in
these circumstances, so it is a question of contacting them. Be prepared for
varying levels of service in these circumstances. The larger organisations will
probably have dedicated bereavement teams who have had training in how to
deal with people who are grieving. Other organisations may not have these
teams and you may not get the sympathy and careful use of language you would
hope for or expect in these circumstances. Even if there is dedicated
bereavement team, the quality of service may be patchy, with delays and people
not doing what they said would do. For example while is was told that as
Executor utility bills would be sent to my home address, in practice this did not
happen and I had to regularly check the post at the address of the Estate I was
managing.
The people owed money will look to the Executor to pay it back. It may be there
is not enough money in the Estate to pay the money owed, and even if there is
enough money there could be a cash flow problem because it may take months
until the Executor can access the money in the Estate. In these circumstances
honest communication with the people and organisations owed money is
probably the best approach.
For smaller amounts of money, such as utility bills, it may be the Executor feels
able to pay themselves, effectively adding a debt to the Estate, because the
Executor themselves is now owed money. Since you will be controlling the Estate,
it will likely be easy enough to pay yourself back out of the Estate later, once you
have access to the money, but be sure to keep accurate records, supported by
receipts, as you could be open to legal challenge for misuse of the funds.
Since there is only so far personal detective work can take you, best practice is
arguably to advertise the death in both a local newspaper, and The Gazette. The
idea is to give parties the opportunity to come forward with a claim against the
Estate, on the understanding it will be harder to legally enforce a claim later in
time if no parties came forward in response to this advert.
This action is especially important if you are an Executor but not a beneficiary
(people who will receive money or assets from the Estate). If parties come
forward with claims against the Estate later in time, they can still attempt to
enforce this claim against the beneficiaries. This means that placing the adverts
offers little protection to the beneficiaries. On the other hand, if no such adverts
have been placed, claims can be made against the Executor.
If parties do come forward in response to these adverts, the Executor has a duty
to weigh their validity. If someone phones and says, ‘I was owed a million
pounds’, that probably is not going to be enough to act on. You will need to seek
as much evidence as possible to support such claims, and potentially take legal
advice on the validity of the claim.
Though I have no specific details on how much fraud takes place in these
circumstances, it seems to me that an open invitation to the general public make
a claim for money against an Estate could be of interest to fraudsters. If in doubt,
seek professional legal advice.

Estate Calculation
Once you have the picture completed of assets and debts, albeit perhaps partly
painted with estimates, you can proceed to value the Estate for Inheritance Tax
purposes. A simple Excel spreadsheet is your friend for these purposes.
Add the assets together in one column, the debts in another column. Deduct the
liabilities from the assets to give a working value for the Estate, noting that this
might change once the estimated figures change into actual values, for example
once a property has been sold.
The details will vary with the circumstances of the Estate, but the table below
provides a worked example.

Assets Debts / Liabilities

House – agent valuation of £300,000 Mortgage - £100,000

Cash Bank loans - £5,000

 Found in the property £200
 Bank accounts £20,000
 (Total cash = £200 + £20,000 =
£20,200)

Premium Bonds £20,000 Unpaid credit card - £200

Shares Unpaid utility bills

 10,000 Lloyds Bank @50p per  Water £100
share = £5000  Electricity £300
 1,000 Tesco @£3.00 per share  Gas £500
= £3,000  (Total unpaid utility bills = £100
 (Total shares = £5,000 + + £300 + £500 = £800)
£3,000 = £8,000)

Car – online auction estimated Funeral costs £5,000

valuation £5,000

Total assets = £300,000 property + Total debts / liabilities = £100,000

£20,200 cash + £20,000 bonds + mortgage + £5,000 loans + £200
£8,000 shares + £5,000 car = credit card + £800 utility bills +
£353,200 £5,000 funeral costs = £111,000

Estimated Estate value = £353,200 assets - £111,000 debts = £242,200

Your own calculations may look similar to this or totally different. You could life
insurance policies on the asset side, or a share in a business venture. It could be
you even end up with a negative valuation, if the debts are greater than the
assets. A negative value is a legitimate outcome for the Estate valuation, though
it does indicate there will not be enough assets to pay all the debts and there will
need to be some careful negotiation over who gets what, guided by the
contractual terms of the debt. If the there is a mortgage for instance, it will
usually be secured on the property and have a legally enforceable claim on the
value of this asset. The purpose of the table is to show the general approach of
totalling assets and debts separately, listing each with a reasonable amount of
detail, then bringing them together for an overall Estate estimate.
Inheritance Tax Thresholds and Scenarios
Once you have your Estate valuation you are in a position to make an
assessment of the different inheritance tax scenarios and see which one best fits
your situation.
Since this guide is being written in 2024, it is assumed you are not dealing with a
death that occurred before 31 st December 2021. In the unlikely event you are
dealing with such an Estate, consult the Government website for guidance as
different rules will apply.
HMRC provide each Estate with an allowance called the ‘nil rate band’. It is called
‘nil rate’ because zero inheritance tax is charged up to this limit.
The Government may choose to change its policy on where the nil rate band is
set. For many years before 2009 the nil rate band was increased each year,
however from 6th April 2009 the nil rate band was set at £325,000 and has not
been increased in the past 15 years. An Estate value that falls in the nil rate
band is sometimes called an ‘excepted estate’.
The nil rate band is not the only allowance or relief. There is also a taper relief on
the tax of gift, a Business Relief, and Agricultural Relief. However, for most
people, the allowance most likely to be used is the Residents Nil Rate Band, not
to be confused with the nil rate band itself.
The Residents Nil Rate Band (RNRB) is £175,000 at the time of writing. It was
introduced in 2017, arguably in response to rising property values that were
leading to higher tax bills after the nil rate band was frozen in 2009. Provided the
Estate is worth less than £2,000,000, and the deceased left their home to
children (including adopted or fostered), or grandchildren, the RNRB means that
an Estate of £500,000 (£325,000 nil rate band + £175,000 RNRB = £500,000)
should have no tax to pay.
Executors should be aware that unused inheritance tax allowances automatically
transfer between spouses. If for example a husband dies and leaves everything
to his wife, his allowances remain used and will transfer to the wife. If the wife
then leaves a home to a surviving child, the Estate will have access to usual nil
rate band + RNRB of £500,000, plus the husband’s similar unused allowances,
making for a combined £1,000,000 that the Executors can use to reduce or
remove the inheritance tax bill.
Be aware that the RNRB cannot be claimed ‘off the books’, nor is it enough to
write a letter to HMRC and let them know you are claiming the RNRB.
Unfortunately you must go through the usual process of completing and
submitting the inheritance tax forms, even if there is no tax to pay.
If you have calculated the RNRB means you have no inheritance tax to pay and
thus attempt to skip this stage and proceed to Probate, your Probate application
will likely be held up because you are not Exempt Estate (i.e. over £325,000) and
thus HMCTS, who administer the Probate service, will want to be sure there is no
problem with the inheritance tax before they start their own work. The
mechanics of this are covered later in the chapter on Probate.
To recap, for most people, the most common scenarios will be:
 Estate value calculated is below £325,000 (Excepted Estate).
Usually, no inheritance tax should be payable and you may proceed to the
Probate application (covered in a later chapter), however keep the Estate
valuation you made as you may be called up to use it as evidence, and it
may also help you in the Probate application.
 Estate has been left to a spouse or civil partner. Registered charities
and community amateur sports clubs currently fall in the same category.
Usually you won’t need to pay inheritance tax, but you may still need
Probate, depending on the circumstances, especially if accounts are not
held in a joint name. See the later chapter on Probate for more details.
 Estate value over £325,000 but Residents Nil Rate Band used. For
many people this will mean there is no tax to pay, but there still could be
an inheritance tax bill for some people. Either way, even if there is tax to
pay, you must complete the inheritance tax forms to claim the allowance
 Estate value over £2,000,000. The size of such an Estate means that
the RNRB cannot be used, and you will likely be facing an inheritance tax
bill. There still could be other reliefs for you to draw on if a business or
agricultural land form part of the estate. If so, it is probably worth either
phoning HMRC to discuss these cases or else seeking professional tax
advice to see if it is possible to legally reduce the tax bill.
 Tax law can change quickly, so it is always worth checking the latest
guidance from HMRC on their website to see if additional exemptions are
available.

I use the term ‘usually’ above, because there are certain circumstances in which
HMRC will wish you to contact them, even in the scenarios above where most
people would not. Tax law can change quickly, so it is always worth checking the
latest guidance from HMRC on their website. Current examples that HMRC wish
to be made aware of include:
 a gift of £250,000 made 7 years before the death;
 giving of gifts with continuing benefit; estate value over £3,000,000;
 having ‘deemed domicile’ status;
 foreign assets over £100,000;
 living permanently outside the UK having previously lived in the UK;
 life insurance that paid out to someone other that a spouse or civil
partner, and also had an annuity;
 increased pension payments while terminally ill if the pension would paid
after death;
 property arrangements avoiding a pre-owned asset charge.
Some of these terms will have a precise legal definition and the HMRC website
includes more details.
This chapter has hopefully given you some useful guidance on whether or not
you need to contact HMRC about your inheritance tax and complete their forms.
For most Executors, the main reason to not contact HMRC and proceed directly to
the Probate application is because you are managing an Excepted Estate.
The next chapter will explore the inheritance tax application itself.
Making an Inheritance Tax Submission

The preceding chapter has looked at valuing the Estate and deciding whether
HMRC need to be informed. If you have come to the judgement that His Majesties
Revenue and Customs (HMRC) do not need to be informed, you may wish to skip
this chapter and proceed to the chapter on Probate.
There is no getting away from filling in this process, and depending on the
complexity of the Estate there may be many forms to complete with information
that will cross reference. It pays to take your time and get the details correct, or
else you risk long delays as a result of HMRC rejecting the forms or coming back
to you with queries. Assuming you don’t enjoy a delayed process and
correspondence with a tax authority, a ‘right first time’ focus and mentality will
pay dividends in terms of reduced stress levels and making the process as quick
as possible so you can proceed to Probate.
Your goal in this process is to obtain a simple piece of A4 paper. When in arrives
in the post it doesn’t look like much for all the effort that went into obtaining it.
You may even feel it should come with a medal if you had lots of forms to
complete. Until it does arrive your ability to proceed with Probate is blocked.
This form will give you a code number that you will need for Probate, so no form
means no Probate application, or rather you can make a Probate application but
it will not proceed and you will get tangled up with explaining why you have
applied with no code. This form will also inform you of an any inheritance tax
that you have to pay, and include a cut off date after which you may assume
that HMRC have no further queries.
Given this guide is written in 2024, the assumption is made that you are dealing
with the Estate of someone who died after 1 st January 2022. In the unusual event
you are dealing with an Estate of someone who died in 2021 or earlier, contact
the HMRC helpline for confirmation of the process to be followed.
While it is possible to obtain the necessary forms in the post from HMRC, it will
save you a lot of time if you either have, or have access to a computer with
internet access and a printer of good enough quality that it will not smudge
letters or numbers. If your printer is going print a 2 that looks like an 8 it may
cause you enormous trouble.
Having the forms available in PDF format will allow you to complete the forms
neatly and make changes without messy use of correction fluid or crossing out in
pen. Your goal is to make the forms as easy as possible for assessor at HMRC to
read and understand, so that they process your application without delay or the
need to come back to you for clarification. The neater and more accurate your
work, the more likely you will convince the assessor that they are dealing with
someone competent, and thus the less likely they will be start asking questions
that create time delays and ongoing correspondence.
The inheritance tax submission comprises a core form called IHT400 in which the
high-level details of the Estate are recorded. IHT400 will then direct the Executor
to complete a series of other forms or schedules as necessary for the assets in
the Estate and the actions that are being performed, such as use of the nil rate
band.
The HMRC website and the IHT400 form itself provide a list of all the relevant
forms. Note that each of these forms usually has its own supporting guidance
document that can be useful. IHT references out to 25 different forms, but the
forms most people will use are probably:
 IHT404 – Jointly owned assets
 IHT405 - property
 IHT406 – bank and building society accounts
 IHT407 – household and personal goods
 IHT409 – pensions
 IHT410 – life assurance and annuities
 IHT411 – listed stocks and shares
 IHT416 – debts due the estate
 IHT419 – debts owed by the deceased
 IHT435 – claiming Residents Nil Rate Band
There are already supporting guidance documents for most of the schedules on
the HMRC website, but it may be helpful to touch each one for the purposes of
completeness. Note that some scenarios involving business or agricultural assets
that may need specialist professional tax advice that varies with the details of
the Estate in question, beyond the scope of this guide.

IHT 400
This is the core inheritance form that connects all the supporting schedules and
references out to them. Take your time in making sure the information you record
is accurate and mistakes may be costly, if only in the time taken to rectify the
mistake.
Note that the form itself lists a telephone helpline – 0300 123 1072. When I used
this, to my surprise I was only on hold for 20 minutes, but it may be as well to be
psychologically prepared for a longer wait. The person I dealt with was
professional and proactively helpful. I did however need to use some trial and
error with the various answer machine number options to connect to the right
department in HMRC.
The form leads off with information about the person who died, but then Q3
incongruously throws in a request for an Inheritance Tax Reference Number,
which may cause some confusion. A note at the top of the form gives the details
of how to obtain this number – note the 3 week turnaround time – so obtaining
this early should be a priority. Though you only need such a number if you have
calculated there is inheritance tax to pay, the note does not say what to do if
there is no tax to pay. While it may be sufficient to leave the box blank, it may be
as well to type in ‘no tax to pay’ to avoid any confusion. For the avoidance of
doubt, if there is no tax to pay, you don’t need to obtain the Inheritance Tax
Reference Number, and can thus save yourself 3 weeks of waiting.
By the time Q17 rolls around, the questions have switched to ask about the
person dealing with the Estate. If you are reading this guide, the chances are this
is you, but remember to record the details of any other people carrying the same
responsibility, such as co-Executors, in the relevant section that comes later.
Q24 asks for a copy of the Will. While the Probate application that comes later
requires the original, HMRC only need a copy. Unless you are blessed with many
original copies of the Will, rarely the case, you can save yourself much potential
stress later by only sending HMRC a copy of the Will. If you’ve only one original
and HMRC lose it, you will have a more difficult time later in the Probate process.
Q29 brings you into the question of which schedules to complete. Each of these
is discussed in more detail below. The more complex the Estate, the more varied
its assets, the more schedules you will need to complete. You will see these are
binary yes / no questions. If the answer is ‘no’ you can ignore that schedule.
There is no need to complete or submit that document.
At Q49, once you’ve completed all the calculations required in the different
schedules (or ruled them out as not relevant), the IHT 400 form now draws you
back to make the inheritance tax calculation. There may be many of the boxes in
the calculation left blank if the schedule concerned is not relevant to you. If you
are using the PDF download version from the HMRC website, it has a built in
calculator that will automatically do most of the calculations for you. While this is
welcome, don’t rely on it and be sure to check all the calculations yourself, using
your own calculator if necessary.
By the time you have got to Q79 you will have the ‘gross value of the Estate’, i.e.
the value before any legitimate deductions are made. These recording of these
deductions (if any) follow on the next page. Note that funeral costs and a
headstone count as deductions. By the time you get to box 96, the deductions
should have been removed to give you the ‘total net estate value in the UK’.
Q97 onwards then requires ‘other assets’ to be added in, including foreign
assets. If there are none, just leave these blank, either way, you will eventually
arrive by Q108 at the ‘Total Chargeable Estate’ on which inheritance tax will be
charged. The following page then provides guidance on calculating the payment
itself.
The ‘Simple Inheritance Tax Calculation’ provide a chance to work out if there is
any tax to pay. Q111 gives you the opportunity to add in the Residents Nil Rate
Band, provided you qualify (see earlier comments in the guide on the relevant
criteria. Q115 then allows the nil rate band, probably £325,000 but check the
‘rates and tables’ as the note suggests because it depends what year the person
died. If you are able to draw on the full £175,000, this, plus the nil rate band of
£325,000, for a combined £500,000, will likely be sufficient to avoid an
inheritance tax bill for many people, or at least substantially reduce the bill. If
you have a negative figure, just leave Q118 blank as there is value on which tax
is charged. If you do have tax to pay, inheritance tax is charged at 40%. Multiply
Q118 by 40% to give the tax payable in Q119.
Stay focused as there are still a few key details to complete. Q121 asks about the
type of grant. If you’ve a Will, you would normally want Probate as the next
stage. If you’ve no Will, it would normally be the Letters of Administration
(similar powers to Probate) as the next stage. If you decide you won’t need either
of these but simply want HMRC to confirm your calculations (if only to have them
agree there is no tax), this is also given as an option.
Q121 also gives the option to note any provisional or estimated figures used in
the form. This seems a useful opportunity to give yourself some protection,
because there will often be assets, such as houses, the value of which can be
estimated, but will not be known for sure until sold. If you’ve totally got the value
so wrong (e.g. the house you estimated at £200,000 sells for £1,000,000) that it
impacts your inheritance tax bill, you will need to contact HMRC and advise them
of the change.
Q122 provides a useful opportunity to double check your work and ensure you
have printed out and completed all the necessary forms / schedules.
Ensure that anyone else (such as co-Executors) sign the declaration on page 14.
There follows another checklist that is worth paying attention to and double
check you have not missed anything.
With our tour of IHT400 complete, let us look at each of the schedules in a little
more detail, though you may decide to skip over those not relevant to your own
application.

IHT 401 – Foreign Domicile

This form will only be relevant to the Estate of those domiciled outside the when
they died. If the person was domiciled in the UK at any point in the last 3 years,
IHT 401 is not completed and the assets instead registered in IHT 400.
Given the domicile status needs a detailed review by HMRC, be prepared for
additional delays and queries if this form is submitted. The decision on the
location of domicile is crucial because it determines which assets get brought
into scope for UK inheritance tax.
Note that you may need to assemble documentation to prove the claims being
made in the form. There may also be complexities involving, for example, double
taxation, that make specialist tax advice a good investment.

IHT 402 – Transfer Unused Nil Rate Band

There are very particular circumstances in which the transfer of unused Nil Rate
Band can be applied for, and these are set out right at the top of form IHT 402.
The nature of the Estate financed and the family relationship must meet the
necessary criteria. In essence though, if the spouse or partner of the deceased
who’s Estate you are managing died first, and did not use all of their Nil Rate
Band when their own inheritance tax work was completed, it may be possible to
transfer this unused allowance to the Estate you are managing.
There are extra complexities with IHT 402, because there is a need to reference
back to the Estate of someone other than the Estate you are dealing with,
provided that this person meets the criteria for the transfer. Though there may
be considerable extra work, it can potentially save you a lot money be reducing
or perhaps even eliminating your inheritance tax bill.
The form lists the information needed, advises of the calculations necessary, and
then at Q18 states the nil rate band available to transfer to the Estate that you
are managing. This is a little confusing, as there is still an additional calculation
to be performed using a percentage figure calculated on the basis of the nil rate
band in force when the first person died.
Note that transfer of unused Residents Nil Rate Band is managed through a
different schedule, IHT 436.

IHT 403 - Gifts

One has to be careful when dealing with gifts of money or other valuables
because, depending on the timing and amount, they may still fall into scope for
inheritance tax. The purpose of these rules are to stop individual avoiding
inheritance tax by gifting significant value shortly before they die.
Not all gifts need to be declared. The IHT 403 form lists the exemptions at the
top of the first page. If there were no gifts, or their timing or value meets the
exemptions listed, there is no need to complete this form.
If gifts were made more than 7 years before death are out of scope for
inheritance tax. If the gifts were made 7 years or less before death, a sliding
scale of taxations called ‘taper relief’ applies. You will see that later questions in
the form ask about the date of the gift and it is important to get this right so that
the correct taper relief (or absence of it) is applied. It is also possible to note
various other reliefs (e.g. Q7) in this form, though you may need specialist tax
advice to confirm if these apply, or else a call to HMRC may be sufficient to
resolve this.

IHT 404 – Jointly Owned Assets

The applicability of inheritance tax on jointly owned assets depends on the
relationship between the people involved and potentially any contractual details
of the asset and how it is to be treated. A spouse or civil partner living in the UK
can inherit assets from a partner who has died without paying inheritance tax,
but the guidance notes on IHT 404 request that the surviving partner still
complete the form, though on a stripped down basis (boxes 1 and 6, and only
columns A, B, F and G.
If you were not married to the person who died, and not a civil partnership with
them, the definition of what counts as ‘jointly owned’ may become more
complex, as may the calculation of the percentage share of the asset, warranting
either a call to the HMRC helpline, or specialist tax advice.
Jointly owned assets involving companies may also benefit from the same action.
In addition to the points already raised, additional complexities with companies
may include the nature of the business, and the number of controlling
participators.
This strikes me as potentially one of the more complex areas of inheritance, so
be careful not exceed the boundaries of your own competence and get specialist
advice if in doubt. Also note that the guidance at start of IHT 404 requests the
provision of other IHT documents in the case of crossover of asset type.
IHT 405 - Property
The contact details will usually be the same as for IHT 400 so the boxes in this
section can be left blank. For the avoidance of doubt you may wish to add a
comments like ‘ same as IHT400’ in one of the boxes.
Q7 asks about the property in question. Column B asks for a description of the
property. There is no need to write chapter and verse or include the level of
detail that an estate agent would use. Something like ‘3 bed semi-detached with
small garden’ will suffice. If you are dealing with a property that has a large
amount of land attached, you may wish to specify the size. e.g. one acre.
Column G asks about the open market value, and it may prove helpful if this
estimate has come from a professional, such as an estate agent, rather than
your own valuation. There is nothing to stop you using your own valuation, but it
may be harder to defend if challenged. For the same reason you may wish to
obtain more than one valuation and take an average, especially if you think a
challenge is likely, perhaps from one of the beneficiaries.
Q9 asks about ‘special factors’. If, for example, the property has a low valuation
due to damage, but the damage can be made good by an insurance policy, and
thus the property be worth more in the future, the details should be recorded
here.
Q12 asks about property sale details. You may decide to keep the property. Be
aware that you may be exposed to capital gains tax on a future sale if the
property does not become your primary residence.
Column F asks ‘do you want to use the sale price as the value at the date of
death.’ You may potentially need to take specialist tax advice on this question
because the best answer will vary with your own personal circumstances. The
issue here is that capital gains tax may come into play. If you value the property
at £200,000 and it later sells for £300,000, you have made a capital gain of
£100,000 and will be taxed accordingly. In order to avoid this outcome, the best
action for many, perhaps most people will be to elect for the sale to be used as
the value at the date of death. This means that capital gain tax will not apply
because you have, in effect, sold the property for exactly it’s value and made no
capital gain. If you believe this is your best option, write ‘yes’, or ‘yes, when
sold’, if the sale has yet to complete. The only reason I can think of to write ‘no’
in column F is if you believe there is a trade off between capital gains tax and
inheritance tax that works to your advantage. Such a calculation is beyond the
scope of this guide and you should seek specialist tax advice if you feel you need
further advice on this matter.

IHT 406 - Savings

This should be a relatively straightforward form to complete. The main thing to
emphasise is to include the account and reference numbers requested. If these
are left blank it may create suspicion from the assessor at HMRC, draw further
questions and requests down upon yourself, and generally make the process
more stressful and time consuming than it needed to be.

IHT 407 – Household and Personal Goods

Q1 asks about jewellery. Only items £1500 or over need be recorded. Obtaining a
professional valuation would seem wise for any such items in order to give a
defensible possession if the valuation is questioned in the future. Get the
valuation in writing and keep a record. Note that the value is set at the date of
death, not at the time of completing the form.
Q2 asks about vehicles, boats and aircraft. The advice on professional valuations
probably applies here to. Note that for vehicles it is usually possible to obtain a
free and quick valuation from online auction sites. These can be printed and kept
as a record.
Q3 asks about antiques. It is similar to Q1, but in this case it does not provide the
cut-off value of £1500, so on the face of it, all such items in the named
categories should be included, regardless of value
Q4 allows for the ‘general sweep’ of other items in the house, such as furniture
and electrical items. If you are confident there is nothing of special value, it may
be as well to make your own rough estimate of the value, noting that second
hand electrical and furniture would normally be worth less than their original
purchase price, or perhaps even have no market value at all if they are in poor
condition.

IHT 408 – Goods Donated to Charity

It is possible to obtain a charity exemption if certain items are donated by you to
a qualifying charity. The inference here of the word ‘qualifying’ is that you can’t
unilaterally declare your friends or relatives are ‘charities’ and donate valuable
items to them to avoid inheritance tax. IHT 408 defines what qualifies as a
charity in the notes at the top. Also note that proof receipt by the charity must
be included.
If the deceased left items to a qualifying charity themselves, in their Will, the
items fall outside the scope of IHT 408 and need not be recorded here.
The amount you calculate in IHT 408 must then be linked back to the relevant
section of IHT 400 in order to claim the deduction – don’t forget the receipts
though, unless you enjoy lengthy delays and additional correspondence with
HMRC.

IHT 409 - Pension

For inheritance tax purposes, HMRC are only interested in payments that have or
would continue after death, because this is value that should be added to the
Estate. If there are no such payments, you will be able to proceed rapidly
through this form without having to include any detail, just ticking a few boxes.
You can see from the bullet points in Q1 that not all such payments need to be
noted.
I expect most people will be able to select ‘no’ to Q1, Q8, Q17, Q18, and Q22. If
so, there is no need to record any of the specific details of the pension(s).
Otherwise, complete the questions as directed to assess how much needs to be
added to the Estate for inheritance purposes.

IHT 410 – Life Assurance & Annuities

It is possible to buy financial products that pay out after death. These may form
part of the Estate for inheritance tax purposes, and the aim of IHT 410 is to
capture these.
The guidance notes at the top of IHT 410 list the type of financial product HMRC
are interested in. Note that pension annuities are captured separately in IHT 409.

IHT 411 – Listed Stocks & Shares

The fact that these assets are ‘listed’ means they are tradeable in a stock
market, and have a value that is quoted by that market, such as the London
Stock Exchange (LSE). If you discover any paper share or unit trust certificates,
or evidence that these are held online, most likely these will be the sort of listed
assets that are relevant for IHT 411.
The maths involved in IHT 411 are not hard, but there may need to be some
detective work to track down the information required. If the stock or shares are
held online by a broker, you will need to contact them to establish what assets
are held.
A further complication is that the value of listed assets can change day by day,
or even minutes by minute if there is a lot of trade in the company. How is the
hapless Executor to place a value on something that changes so quickly? The
answer is that you use the closing price at the date of death. For this reason it
may prove useful to buy a newspaper on the day of death such at the Financial
Times, that provides share prices for the larger companies and unit trusts. If you
don’t remember on the day, and let’s face it most people will probably have
more pressing concerns, it may be possible to obtain the newspaper by other
means. These days there are also many websites that provide charts of share
prices over time, and a Google search may be sufficient. However you obtain the
proof, make sure you keep a copy as evidence in case of future challenge by
HMRC.
Once you’ve found the value of the share or other asset on the correct day,
simply multiply by the number of shares held to obtain the value of the asset. Of
course, if shares are held in multiple companies, the calculation will have to be
performed for each one.
If the company, or stock, pays a dividend (not all do), and this has yet be
received, the value needs to be captured in IHT 411. Most of the larger
companies will list their dividend timetable online, probably under the heading of
‘Financial Calendar’ or ‘Investor Relations’.
In the unlikely event (IHT 411 itself describes such an event as ‘extremely rare’)
the deceased owned so many shares in the company they had a controlling
interest, you are advised to use IHT 412 instead. On the face of it, owning over
50% of the shares in a company would give a controlling interest, but corporate
affairs can be complex, so seek professional tax advice if necessary.

IHT 412 – Unlisted Stocks & Shares

Not all stocks and shares are listed on an open market. These assets will be rarer
than listed shares. Few people will hold unlisted shares but the purpose of
IHT412 is to capture the value of these assets.
The decision of whether a share is listed or not is made by HMRC, based on
whether they think the market qualifies or not. As a broad rule, if you can’t find
the price of your share in a newspaper or quoted online, it may be worth calling
HMRC to clarify.
The fact that unlisted shares do not have a readily available value quoted on a
market makes them much more difficult to value. Difficult though the task may
be, what won’t wash is declaring the task too difficult and entering no value at
all. It may be the company themselves can supply a value, based on their current
profitability. A conversation with HMRC or specialist tax advice could be useful if
you hold these assets, especially when you consider it may possible to obtain
Business Relief on unlisted shares, provided you meet the qualifying conditions.
However you perform the calculation, keep a record. HMRC have a specialist
team who deal with these cases and it may be you have to defend your position
or negotiate with them.

IHT 413 – Business & Partnerships

As with ownership of unlisted shares, business and partnerships assets will be
relatively rare. The definition between what is an ‘unlisted share’ and what is a
business may be a grey area, so seek specialist advice if necessary.
The purpose of IHT 413 is to set a value for the business or partnership asset and
apply for the relevant reliefs, all supported with sufficient evidence to back the
claims and assertions being made.
It should be noted that at the time of writing there is speculation in the press
that the Government is considering amending or removing these reliefs, so be
sure to check the latest position with HMRC or specialist tax advisor.
This is one of the more complex areas of inheritance tax, requiring detailed
answers to relatively complex questions, potentially difficult estimations of the
asset value, and involving the potential for tax relief at different tiers in an
environment where the Government may be minded to make changes in the
near future. It seems to me that all of this significantly increases the chance of
making a mistake, or that HMRC will raise queries with the IHT 413 submission.
As such it could be worth seeking professional specialist tax advice, including tax
planning before death.
As a reflection of the complexity of these matters, IHT 413 at least offers the
opportunity at Q25 to add additional supporting information, something most of
the schedules don’t allow. This could be useful in supplying a level of detail that
may satisfy HMRC and prevent them coming back with further questions and the
time delay this will entail.

IHT 414 – Agricultural Relief

Again, this will be a relatively rare schedule that will not be relevant for most
people. IHT 414 allows for the deduction of agricultural relief, though as with
business relief, at the time of writing there is speculation in the press that
agricultural relief may be changed by the Government.
Note that each agricultural holding will need its own schedule completed, so IHT
414 is unusual in that it may potentially need to be completed multiple times.
Each holding must be supported by a plan showing the location and extent of the
holding.
Q5 asks for a ‘detailed description’ of the farming activities. Responding with a
non-detailed description such as ‘farming’ or ‘crops’ seems likely to draw further
questions from HMRC, and time delays this will bring. Proving information on the
type or crops of animals, relevant numbers, and any changing patterns through
the year will decrease the chances of further questions.
Q6 seeks to draw out how involved the deceased was in the farming activity. The
heavier the involvement, the more likely the agricultural relief will be approved.
The questions references above and others that follow in the remainder of the
form make IHT 414 one of the more complex areas of inheritance tax
management, posing a number of potentially complex questions where specialist
tax advice could be useful.
As with IHT 413, as a reflection of the complexity of these matters, IHT 414 offers
the opportunity to add additional supporting information, something that could
be useful in supplying a level of detail that may satisfy HMRC.

IHT 415 – Interest in Another Estate

IHT 415 is another relatively rare schedule that will not be relevant for most
people. The purpose of this schedule is to account for the unusual situation in
which the deceased had the right to an inheritance of someone who died before
them, but they did not receive the inheritance before they died. Potentially
these assets may need to form part of the Estate that you are managing.
This activity may require significant detective work to track down the necessary
documentation and evidence of the assets involved. Note that Q10 allows you
use estimated valuations, but you must note that you are doing so.
IHT 416 – Debts Due to the Estate
This schedule is used to record debts owed to the deceased by other parties, as
they potentially form an asset.
HMRC request that a separate schedule is completed for each debt. Note that
any accrued interest on the debt also needs to be accounted for in this schedule.
Perhaps there could be situations in which it is believed the debt, or part of the
debt, will not be recovered. If so, try to include as much information as possible
as possible to defend this position and reduce the chance of follow up queries
from HMRC. Q9 would seem the best place to make this case.

IHT 417 – Foreign Assets

While IHT 401 is concerned with a person living abroad, IHT 417 is concerned
with assets held abroad by someone who permanently lived in the UK. An
example would be a holiday home in Spain and perhaps a bank account there
too. IHT 417 makes provision for the deduction of aligned liabilities, such as
mortgages.
If businesses, land or property forms part of the assets read the guidance note
on page 4 for the level of detail to be provided. If you skimp on the detail
requested, you increase the chance of HMRC coming back to you with follow up
queries that will create delay.
Perhaps there are unusual cases, but foreign assets will normally be quoted in a
foreign currency. Like share prices, the value of these currencies relative to
Sterling can change minute by minute. The exchange rate to use is the prevailing
rate at the date of death. See the note on page 4 for exactly how this should be
determined, and be sure to present the calculation the way HMRC request.
Given the guidance note on page 4 mentions double taxation relief, there could
potentially be cases where specialist tax advice is worthwhile.

IHT 418 – Assets Held in Trust

The purpose of this schedule is to capture the value of any rights the deceased
had to benefit from a Trust. If the Trust has already paid out in the past,
presumably the cash value will already have been realised, so IHT 418 is focused
on those cases where there is right to value that has not yet been realised or
converted.
The questions posed in IHT 418 may require a significant amount of detective
work to track down the necessary information. The relative complexity of some
of the questions may also make specialist tax advice, or at least a clarifying
question to HMRC, worthwhile.

IHT 419 – Debts Owed by the Deceased

While IHT 416 is focused on debts owed to the deceased, IHT 419 is focused on
debts owed by the deceased. Debts owed by the deceased may potentially be a
liability to the Estate. Examples of debts could include loans, overdrafts, and
money spent on behalf the deceased that is to be paid out of the Estate. This
last point is particularly of note because it may be that you as Executor incur
expenses on behalf of the Estate that has not yet been repaid, perhaps paying
bills, and you have the opportunity here to formally account for them and explain
why money from the Estate should be paid to you for these debts.
The guidance notes at the top of IHT 419 are unusually long, noting rules and
exemption on what can and cannot be claimed, so take the time read these
carefully and assess these against your own position. There are some technical
questions to consider here like whether an ‘excluded property’ applies, whether
there are ‘real commercial reasons’, special relief scenarios, and the nature of
gifts. If in doubt about these call HMRC to discuss or seek professional tax advice.
Q6 provides an opportunity to give more detailed explanations in support of the
information provided, and this could be useful in avoiding follow up queries by
HMRC and the time delay this will create.

IHT 420 – National Heritage Assets

Certain buildings, land, works of art, and other objects may be given special
status to exempt them from inheritance tax (and possibly also capital gains tax).
This will be a rare exemption and most likely this schedule will not be relevant for
you.
In order to qualify the asset must be deemed to be of special interest, by kept in
the UK, and the public given access. Quallifying assets are termed ‘Conditionally
Exempt’. The tone of the language at least suggests that HMRC reserve the right
to change the conditions of the exemption.
Broadly speaking, the test for whether assets meet the necessary standard
includes factors such as whether it is pre-eminent of the grounds of national
scientific, historic, or artistic (or scenic in the case of land) interests.
While the broad remit of this schedule is not hard to understand, the devil is in
the detail. The finer details of what qualifies may be open to interpretation, or
require some negotiation. Having agreed to the terms of the scheme, it may be
difficult to implement in practice, such as allowing sufficient public access to the
asset. Given that the value of the asset in question is probably very large,
mistakes with this schedule, or failure to include all the necessary information
could be costly. This is one of those areas where professional tax advice is
probably worth the investment.

IHT 421 – Probate Summary

From 17th January 2024 IHT 421 no longer needs to be completed. This schedule
has been superseded because HMRC have made a process change. When HMRC
respond with confirmation of your inheritance tax calculations, the letter includes
a unique code and Estate values. When you later make the Probate application to
HMCTS, this is in the information you will use, rather than replying on IHT 421.
Part of the reason for this change is to stop early, and potentially incorrect
Probate applications that contain the wrong Estate values for inheritance tax.
The new system means you can apply for Probate knowing that HMRC have
agreed your initial calculations (noting that if you have used estimated figures
you may need to go back to HMRC and amend the values, especially if these
change your inheritance tax calculation.
Northern Ireland and Scotland appear to be retaining the old system, however.

IHT 430 – Reduced Rate of Inheritance Tax

If the deceased left at least 10% of their net (i.e assets less liabilities) estate to a
qualifying charity, it may be possible make a claim to pay inheritance tax at the
reduced rate of 36%. That may not sound like a large difference from the
standard inheritance tax rate of 40%, but it could amount to a substantial sum
on a large estate. If, in your position as Executor, you believe you are managing
an Estate that qualifies, IHT 430 is the form you will use to make the claim for
the reduced rate.
The text at the top of the form notes a few other scenarios in which you may
wish to complete IHT 430, and includes a link to an online calculator that will
help determine if the Estate qualifies. The online page of the calculator details
the information that is needed to complete the process. These questions
potentially require an advanced level of detail about the Estate, and so this may
be best left until relatively late in the process so that you have time to
accumulate the necessary information. That said, please note that IHT 430 must
be submitted within 2 years of death, so be careful not to delay too long.
The accompanying notes for IHT 430 are unusually long and complex because
they touch on the concept of ‘components’, which are split into 3 different
categories, each potentially treated differently. There is also an option later in the
form to merge these components. Although an example of how to perform that
calculation is provided, you may wish to obtain specialist tax advice if called
upon to perform this calculation, or at least phone HMRC to discuss your
calculation.
Note that all the appropriate persons must sign the declaration at the end.

IHT 435 – Residents Nil Rate Band

Only complete this form if you meet the qualifying criteria set out earlier. So long
as you do meet the criteria, this is a powerful form that can potentially eliminate
your inheritance tax bill, so take the time to complete it properly. Read the
instructions in each box and perform the calculations requested carefully. Double
check your work, even better ask someone else to check it too.
The form includes it’s own set of guidance notes on pages 5-7 and these are
useful in defining some of the more unusual terms such as ‘grossing up value’.
Note that if the qualifying criteria apply, it may also be possible to transfer
unused residents nil-rate band and thus potentially even double the standard
rate. A separate form, IHT436, must be completed to claim this transfer.
Q25 refers to the ‘residents nil rate band calculator’. This is a useful online tool,
the web address for which is given on the form. You are prompted to answer a
series of questions, after which you are provided with the value to use.

IHT 436 – Claim Transferable Residents Nil Rate Band

This schedule fulfils a similar purpose to IHT 402, involving the transfer of
unused allowance from a spouse or partner who died before the person who’s
Estate you are managing.
While IHT 402 facilitates the transfer of unused Nil Rate Band, schedule IHT 436
facilitates the transfer of unused Residents Nil Rate Band, i.e. the tax relief
associated with a property and family relationship that meets all the necessary
criteria.
Since this is in effect a request to enhance the existing Residents Nil Rate Band,
IHT 436 should only be used if IHT 435 is also being submitted.
The deadline for submitting IHT 436 is relatively tight, with HMRC allowing 2
years from the date of death of the Estate that you are managing (not 2 years
from the death of the spouse or partner who died earlier).
The maximum amount of Residents Nil Rate Band that can be transferred
depends on the relevant tax year. Note 2 includes a summary by year. The
maximum at present is £175,000, assuming the person who died first did not use
any of this allowance.
Notes 4 and 5 advise that Taper Relief applies on larger Estates, so you may not
be able to claim the full amount. It may be worth phoning HMRC or seeking
professional tax advice if you are managing a larger Estate that falls in this
category and the required calculations are unclear.

IHT C1 – Confirmation Inventory

This schedule only needs to be completed to apply for confirmation if the
deceased lived in Scotland. It applies from 1st January 2022.

Completing IHT 400

The schedules noted above are all those listed on the checklist for consideration
on page 13 of IHT 400. Tick those that you deem relevant to the Estate and that
you have fully completed.
Many of the schedules will require you to return to IHT 400 and enter a figure.
Perhaps in the future the system will be moved online and then the various
schedules can be made to automatically transfer the correct fields back to IHT
400. For now, you must do this yourself. If you make a mistakes, even a simple
one like transposing numbers, perhaps writing £100,890 when you should have
written £100,980, you risk creating delay and queries from HMRC. Take the time
to read IHT 400 carefully and extract the right number from the right box in the
right schedule. Triple check your own work, and if possible, have someone else
check it for you, if only to confirm you correctly transferred the numbers into IHT
400 from your schedules.
By the time you reach page 12, the time has come to calculate the inheritance
tax payable, or else to note that no such tax is due. If you don’t want to calculate
the inheritance tax yourself, HMRC offer to do it for you, with no charge. Tick the
box at the top of page 12 if you wish to use this service.
Alternatively, page 12 allows you to perform your own calculation of inheritance
tax, using boxes 111 – 119. If you have Residents Nil Rate Band (111) or Nil Rate
Band (115) available, the calculation here provides the opportunity to make the
necessary deduction. For many people one or both of these deductions will be
sufficient to reduce the Value Chargeable to Tax (118) to zero, or a negative
number, in which case you may leave Q118 blank. Since inheritance tax is
chargeable at 40% on the amount given in Q118, if the Chargeable Value is zero,
there is no inheritance tax to pay, and this Q119 can also be left blank.
If your calculation leaves you with a Chargeable Value at Q118, you will pay
inheritance tax at a rate of 40% on this amount. Multiply your figure at Q118 by
0.4 to find the value to be entered at Q119. Note that there is no low value cut
off for this calculation. Even if you have a Chargeable Value of £100, creating
inheritance tax of £40, you may think this is too small an amount to bother with,
but HRMC make no such provision. Q119 makes provision for an amount in
pounds and pence, which is to say that HMRC expect you to make the tax
payable calculation accurate to the penny. You may think this is pedantic and a
waste of time, but if you enter the wrong calculation, perhaps even down to the
penny, you risk HMRC rejecting your work, or coming back to you with queries.
For cashflow purposes, it is useful to note that it may be possible to have
inheritance tax paid directly for the deceased’s existing savings. This could be
very useful if you have not been able to take control of these accounts yet,
perhaps awaiting the grant of Probate to do so. If you wish to take up this option
use Q120 and complete the schedule directed, depending upon where you live.
Q121 is important for directing HMRC on the type of grant application you are
making. For most people this will likely be ‘Probate’. If the Will is missing or
other problems with this document have emerged, you will be applying for
‘Letters of Administration’. If you are not seeking either of these, most likely
because the Estate is too small, and just want to have the comfort of HMRC
confirming your calculations are correct, there is a ‘Confirmation’ option.
Page 13 offers a self-reminder as well as a guide to HMRC on which schedules will
be included in your application. Take the time to get this right because if you tick
the wrong box by mistake HMRC may come back to you with further queries,
perhaps seeking to understand if something important is missing. This additional
correspondence will add much time to the application process.
Page 13 also offers the opportunity to note any ‘provisional values’, which is to
say figures you have used in IHT 400 that may be subject to change, probably
because you or someone else has estimated them. Examples might include a
house that has been valued by an estate agent but has yet to be sold, and you
won’t know the value until the sale is complete. If you are going to enter items
here, why not boost your credibility with the person at HMRC assessing your work
by also noting where in the form your estimated value applies? In the example
provided, the provisional value of a house, you could write ’51 – house value’, 51
being the box in IHT 400 where the house value is recorded. If these provisional
values change materially, which is to say they change the value of the
inheritance tax payable, you will need to contact HMRC again to agree the
necessary changes.
Page 14 is where all the appropriate people need to sign, for example if there are
two Executors of the Will, both must sign to agree the contents of IHT 400. Since
you also need to send a copy of the Will (provided you have one) to HMRC, they
will be able to check if any Executor has not signed.
Page 15 provides a further checklist and reminder of supporting information. As
with the checklist on page 13, take the time to complete this accurately to avoid
follow up questions from HMRC and the delays this will incur.
Page 16 offers a final opportunity to note ‘additional information.’ While there
may be a temptation to wax lyrical here and note down general worries,
concerns and frustrations, it may be as well to read the sort of information that
HMRC are asking for, and perhaps avoid the temptation to write anything unless
you feel you really need to, especially if it does not correspond to the information
that HMRC are asking for.

Submitting IHT 400

The schedules noted in the section above are all those listed on the checklist for
consideration on page 13 of IHT 400. Tick those that you deem relevant to the
Estate, check that you have fully completed each one, and included it in your
pack to post to HMRC.
Even if you have calculated there is no inheritance tax to pay using IHT 400,
there are still good reasons to submit the form. The most pressing of these
reasons is the Probate application, which may not proceed until HMRC have
confirmed there is no inheritance tax to pay. If the Estate is worth over £325,000
and you attempt to proceed with Probate without HMRC confirmation, it is likely
your application will be delayed.
A second reason for submitting IHT 400 with no inheritance tax to pay is that it
gives peace of mind, because you will have conformation from HMRC that they
agree your calculations.
In addition to a paper copy of IHT 400, signed by all the relevant parties, you will
also need to include:
 Although IHT 400 can be completed in pen (blue or black according to the
form instructions), if you have access to a computer and printer, it’s
probably better to fill in the fields on a PDF. Not only will this make
 correcting errors much easier, it will also mean you produce a neat
document, provided the printer is of reasonably good quality.
 All the schedules you need to support the application. These should all
have been noted in the tick boxes of page 13 of IHT 400. Take your time
and double check you included all the schedules you need to and that
these correspond with what you have ticked on page 13. If a schedule is
missing or you have ticked the wrong boxes, it is likely HMRC will come
back to you with queries and this will consume much time.
 A copy of the Will and any codicils. Note that unlike the Probate
application that will follow, the inheritance tax work does not require that
the original Will and codicils be sent. If you send the originals and they
are the only versions you may incur a significant delay in getting these
documents back from HMRC, plus you increase the chance of the
documents being lost. It will be much more difficult to obtain Probate if
you have lost the original Will or it’s codicils, so take the opportunity to
make copies, keep the originals safe, and send the copies to HMRC.
 An original Death Certificate – in this case a copy will not usually be
sufficient, you must one original certificate.
 Any supporting information, such as professional valuations. The
instructions at the head of IHT 400 advise that you do not have to send
the originals, a copy will do.
 Though a covering note is not a formal requirement, I recommend
including one because it helps add to the impression that you are a
professional person who has done a thorough job. There is no need to
write chapter and verse, a single page of A4 should be sufficient. Include
your name and contact details, state why you are applying, what
information you have included. If you have included supporting
information, such as valuations, clearly state what part of the IHT 400 or
supporting schedule these are addressing. If you have calculated there is
no inheritance tax to pay, it is worth stating this up front so the assessor
knows what to expect from the rest of the information.
When you have you pack assembled, put it together in a neat and logical order,
because you are looking to give the impression you are a neat and logical
person, the sort of person who will enter logical and correct information in a
form. If you present the information in a haphazard way, it is potentially a red
flag that you are disorganised person who will make mistakes, and therefore that
your work should be checked very thoroughly, with the initial suspicion that you
have likely done something wrong. A logical order would be something like –
covering note – IHT 400 – supporting schedules arranged in numerical order –
other supporting information – copy of the Will – Death Certificate.
Place your information in a sturdy A4 envelope. You may also wish to brace the
top and sides with tape, because if anything falls out it will likely undermine your
whole application.
The submission address at HMRC is given on the IHT 400 form. I won’t quote it
here in case HMRC change it. Note though that the postcode, at least at the time
of writing, does not correspond to city, as most postcodes usually do. The IHT
400 postcode is a special creation for HMRC, allowing them to move the work
around the country.
There is no requirement to avoid the cheapest postal option, second class, non-
recorded delivery. However, given this is time sensitive information that may
delay you starting other work, such as Probate, you may decide to pay the extra
for first class. Perhaps more importantly though, if you can afford it, I would
recommend paying the extra for at least record delivery. This will mean that you
know, and have proof in any future dealings with HMRC, that your submission
was received. Again, it adds to the impression that you are someone who is
organised and has taken this work seriously. If you do use the recorded delivery
option, be sure to keep a copy of the proof.
Once the letter has gone in the post, it is over to HMRC to do their work. You
could perhaps make a start on the Probate form, but there is little you can
formally progress until HMRC respond.

The HMRC Confirmation Response

Though HMRC have an aspirational target of a response within 10 working days
of receipt, when I telephoned them in 2024 the recorded response requested that
people did not chase their applications until 20 working days from the date of
receipt. If you have used the postal recorded delivery service, you will know the
date of receipt, and can then calculate the 20 working days on top of that.
Essentially then, you might expect a response in about a month. Though I have
heard of people receiving a response within a week, these will be the rarity.
If there is missing information, or HMRC have follow up queries the letter should
state what you need to do next. Since this will be on a case-by-case basis, there
is not really much a help guide can add in these circumstances, other than to
follow the instructions given and seek professional advice if necessary.
Otherwise, the letter should hopefully offer confirmation in keeping with the
purpose you stated in IHT 400, e.g. request for Grant of Probate or one of the
other options.
Given the time and effort you’ve put into this work you might reasonably expect
a trophy, a gold medal, of at least a beautiful and ornate certificate, but when
the HMRC response comes through the letter box it is only a single sheet of A4
paper. It may not look like much, but that piece of paper is potentially the
gateway to proceeding with the Probate application, so if you feel a sense of
relief at having the confirmation of your work, you are probably not alone.
If you applied for Probate the letter will confirm that you may now proceed with
the application and crucially provide you with a ‘Unique Code for Probate
Application’, not to be confused with the IHT Refence Number. For the avoidance
of doubt, the Unique Code is the one you will use in your Probate application.
The letter will also provide the gross value and net value of the Estate. You will
also need these figures for the Probate application itself.
If there is no inheritance tax to pay, surprisingly the HMRC letter does not make
this as an absolute statement. If your IHT 400 submission indicated there was no
tax to pay and HMRC have not asked for more information, it is reasonably safe
to assume that HMRC agree there is notax to pay, even if they don’t openly say
so. As a further test, I have heard that if the IHT Reference near the top of the
letter starts with an ‘A’, it indicates there is no tax to pay. The examples I have
seen confirm this to be true.
If you lose this form it should be possible to obtain a replacement from HMRC,
but at the cost of significant time delay, so by whatever means you deem best,
be that taking a picture on your phone, locking the document in a safe, make
sure you keep the letter safe so that you have the information needed for the
Probate application to hand.
HMRC give themselves some wriggle room to come back to you with further
questions, specifying a future date after which you may assume there are no
further queries. Mark the date in a calendar so you know when this has passed,
and that you have a greater sense of security in your application.
Even so, HMRC include a further caveat, which is that you must advise them of
any changes that result in a change to the tax due. If there are changes,
such as the value realised on a property being higher than the value you
estimated in IHT 400, but these changes still mean there is no tax to pay, HMRC
advise that you do not need to contact them.
Now that you have the HMRC conformation there should not be any barriers to
starting the Probate application, so you may as well enter these codes and
values sooner rather than later.
Probate Application

The purpose of Probate is to assume the legal powers to take control of the
assets in the Estate. These might typically be money in bank accounts, a
property, shares, and premium bonds, but could include more exotic assets such
as farms and business investments.
This obviously means that Probate is very powerful, potentially open to abuse,
and so the Government control the grant through a rigorous application process.
While inertance tax is administered by HMRC, the Grant of Probate is
administered by His Majesties Courts and Tribunals Service, abbreviates to
HMCTS or sometimes just CTS. This means that you are dealing with a different
Government department and that you will have to submit a whole new set of
information, including a different application form. However, if you have the
Unique Code for Probate Application from HMRC, this will give you a big head
start with the Probate application.

Why Probate May not be Needed

Even if you assets to take control of in the Estate, it may be you can do this
without needing to apply for Probate, especially if there the Estate is purely
made of cash accounts or insurance products, and no property or other assets
classes.
Financial companies will often allow an Executor to take control of an account
without Probate provided that certain conditions are made. Each organisation
has its own rules and since these could be changed at short notice, it is probably
not helpful to provide a list of the rules of each of the big organisations here.
However it is possible to provide some rough guidelines.
In order to take control of an account without Probate you will likely need at
least:
 an original Death Certificate
 an original Will in which you are the named Executor
Beyond this each organisation may have their own evidence or document
requirements that can only be found by contacting them.
In additional to these document requirements, each organisation will also have
its own financial threshold for allowing control. If the cash in the account is
under the threshold you may be given control, while above the threshold you will
be asked to provide a Grant of Probate.
There is no obvious consistency or logic across the industry on where the
threshold is set. Some companies may state a threshold below £50,000, others
below £5,000. The figures you see one month could be changed the next. It is
purely a matter of company policy in which the Government does not seem to
interfere. This being the case, your best bet is to contact the company directly
to determine their policy.
Most of the larger financial organisations have dedicated bereavement services.
The contact details for these can usually be found by simply Googling [name of
company] bereavement service. If the company has a high street presence it is
usually possible to initiate the process in the branch, though you will probably be
referred to a specialist bereavement service to complete the process and
potentially go through additional security checks.
The larger companies with specialist bereavement services will likely have had
specialist training, so you may hopefully expect a degree of sympathy for your
loss, even if this is only standard patter that people have been told they must
say. If you are dealing with a smaller company it becomes more likely they will
have no specialist bereavement service, and consequently the experience of
dealing with them may be less efficient and perhaps less sympathetic to your
loss.
If you are able to take control of these accounts you will usually have the ability
to close them completely, either by transfer or cheque. This raises the question
of how to treat the money, and this becomes more complex if you are managing
money on behalf of other beneficiaries.
It is possible to establish a dedicated Executor account, including a joint account
of there are multiple Executors, but not all banks offer them, and, anecdotally, if I
have heard that, because it is a relatively unusual request, the bank staff are not
always confident of how to complete the process. There may also be additional
security requirements that make the process onerous. All that said, creating an
Executor account is arguably the gold standard of Executor behaviour, especially
if you are not a beneficiary yourself.
While it may be the gold standard, there is no legal requirement to create an
Executor account and it should usually be possible to complete the whole
Probate process without one, though perhaps there are some unusual cases
where an Executor account becomes essential. What I would recommend is to
avoid mixing funds, adding money obtained through Probate to your own
account, because if you are called upon to provide evidence of how the money
has been transferred and used, it may become much harder to give a
transparent account. A sensible middle ground is arguably to create a new,
separate ‘standard’ account with your existing provider that is used purely to
handle Estate finances. If you need to provide evidence of how Estate money
has been used, all the money going in and out will be neatly recorded in one
place.

The Probate Application

Unlike the inheritance tax submission, which for the time being at least is purely
postal, HMCTS offer a partial online application, though you will still need to send
supporting information in the post. The first decision you have with the Probate
application is whether to make a postal application or an online application.
While this must come down to a personal choice, the online route offers the
potential for significant time saving, perhaps saving months over the postal
application route.
I am not sure why the time saving is so significant, but presumably HMCTS find
the online applications easier to process, possibly building in a degree of
automation in the checking of the form that allows them to make a swifter
decision.
This swifter processing of the online application will only hold true if there are no
mistakes in the application itself. If incorrect information is entered or required
information omitted, your work will go down a separate route for more rigorous
examinations and potentially the posing of further questions from HMCTS. As
with inheritance tax submission, your goal is to create a complete, accurate, and
professional looking submission that gives the person assessing the work the
impression you are a competent and honest person who’s work should be quickly
approved so that they can move on to the next submission.

PA1P / Online – Probate Application Form

The Probate application is made on form PA1P. If you use the online application
process the form is essentially the same but because it has a degree of
automation built in, you will only be asked the relevant questions. This makes
the application slightly shorter and therefore quicker.
The complexity of PA1P relative to IHT 400 is greatly reduced. If you have
completed IHT 400 in support of inheritance tax, you should find PA1P much
more simple. Even so, take the time to enter accurate information.
In addition to information about the person who has died, and the person(s)
making the application, PA1P has two main areas of focus:
 the status of the Will and codicils
 the assets of the Estate
This is very much a legal process you are engaging in. The Will and supporting
codicils are legal documents, and Probate will grant you extensive legal powers
over the finances of the Estate. HMCTS are therefore rightly seeking to make
sure applications are legitimate. This is why they ask for the originals, rather
than copies that are much easier to fake. If there are any signs the documents
have been altered from their original state, HMCTS will likely raise queries.
If you have completed the inheritance work with HMRC, using form IHT 400 and
supporting schedules, and received the HMRC confirmation, the Estate valuation
should be straightforward forward because the Unique Code and gross / net
asset values are neatly summarised on one page and you simply need to type
them in accurately.
If you have not obtained this information it is unlikely you will be able to proceed
with the Probate application, unless you meet the necessary criteria, such as
being a fully qualified Exempted Estate (i.e. under £325,000, plus all the other
conditions). In order to help determine if you do meet the qualifying criteria, and
what the net and gross assets figure are, the form provides a link to an
‘inheritance tax checker’ that includes an ‘inheritance tax calculator’. These
checkers and calculators will advise on your eligibility and guide you through the
steps to determine the net and gross figures needed for the Probate application.
All the named Executors will need to sign the application, or else the reasons
provided. A further advantage of the online application process is that those
Executors not making the application can sign remotely. Provided the email
address of the other Executors has is correctly entered through the online
process, they will be automatically contact and provided with the means to sign
electronically. If you have multiple Executors living far apart, this can create a
significant saving in time, logistics and postal costs.
Whether you are applying by post or online, you will need to provide supporting
information to HMCTS by post. Helpfully, if you use the online process,

Probate Fees
Whether the application is by post or online, there is an application fee to pay. At
the time of writing the fee is the same for both options, £300, but of course this
is subject to change by the Government, so be sure to check the latest figure
with HMCTS, though if you are applying online the fee will be automatically
calculated. At present there is no fee if the Estate is very small, currently
regarded as under £5,000, though with an Estate of this size it may be you can
access the assets without Probate anyway.
Unless you specify otherwise, HMCTS, provided all goes well, will provide you
with a single Grant of Probate. Depending on your point of view and personal
requirements this could be problematic for several reasons.
 Firstly, if you lose the document you have effectively lost the power to
exercise Probate until you can obtain a replacement from HMCTS.
 Secondly, if there are multiple Executors, each person might reasonably
expect at least one original Grant for themselves.
 Thirdly, even if there is only one Executor, that person may be called upon
to deal with multiple organisations who all require a the Grant of Probate
to proceed with their work.
The good news is that it is possible to obtain additional original copies for a very
small amount of money relative to the time and hassle it will take to obtain
further copies from HMCTS at a later date.
The question of ‘how many Grants is enough’ must be a personal decision, and
should be guided by the complexity of the Estate, the number of Executors, and
the number of organisations that must be dealt with. However, given the small
upfront cost, I think there is a good case for ordering slightly more than you think
you will need.

HMCTS Response
Provided all has gone well, the HMCTS response will be the Grant of Probate
itself, with no covering letter or any other documentation.
As with the HMRC response to your inheritance tax work, you might feel your
efforts deserve a very fine certificate, but the Grant of Probate is quite
understated when it arrives. A single sided piece of A4 paper, it at least looks
somewhat more official than the HMRC response, bearing a stamp from the High
Court of Justice, and a small silver security sticker.
The Grant of Probate should name the person who has died, and confirm that
HMCTS have registered the Will. The document will confirm the right to
administer the Estate has been granted to specific named individuals.
If HMCTS respond with queries about your application these will have to be
resolved before Probate is granted.

Using the Grant of Probate

The Grant of Probate is a very important legal document, granting extensive
powers over the Estate finances, so keep it safe and secure. It is not a document
you want to fall into the wrong hands.
If the value of funds in accounts of the Estate were below the necessary
thresholds of the institutions holdings the money, it may be you have already
been able to take control of the money without Probate. At the present time, it is
unusual for accounts of £50,000 or more to be released without Probate, though
some organisations set the threshold much lower than this. For these larger
values it is likely you will need to present an original version of the Grant of
Probate to the organisation. If the organisation has a high street presence, such
as a bank, it may be possible to take the document in person and avoid the
hazards of a two-way trip through the postal service.
Even if you have been able to avoid the need to use Probate to access financial
accounts, you will need it if there is any property, business interests, of similar
transactions in which lawyers or legal professionals become involved to arrange
the transfer of assets from one person to another.
Many Executors will have a property to sell. The Grant of Probate does not
automatically transfer the property to you, but it does give the legal right to
arrange the transfer of the property to yourself or someone else. If you are
seeking to sell a property on the open market, there is no need to have it
transferred to your ownership first. A Probate sale should be familiar work for
estate agents and the legal professionals, though you may wish to advise the
buyers the transaction is a Probate sale.
Either way, you will need to engage the services of a suitably qualified solicitor
or conveyancer. Check to make sure they are registered and regulated with a
professional body. As a personal preference, given they will potentially be
holding a large amount of my money, I prefer to deal with an organisation that
has a physical presence I can visit and gain some assurance it is well established
and not liable to disappear overnight. It seems to me that this risk is heightened
with online only organisations.
Your legal representative will need to see an original Grant of Probate, and
perhaps make a copy for their own records, but they should not seek to keep the
original. Note that if the Grant records multiple Executors, the legal
representative will want to confirm that all are agreed on the instruction to sell
the property.
The fact you are managing a Probate property sale may mean you dealing with a
property that you may never have lived at, and thus lack a full picture of the
property’s history and documentation. It seems to me that honesty is the best
policy in these circumstances. The legal transaction will likely require you to
answer questions about the property and if you provide false information to the
buyer it may be detrimental to you in the future. If you don’t know the answer to
a question or lack a document requested, discuss with your legal representative,
but it may be best to simply respond that you are not in a position to answer due
to the Probate nature of the sale.
It may be possible to build in a degree of legal protection by selling the property
with ‘limited title guarantee’ rather than the more usual ‘full title.’ Such an
action is not unusual in a Probate sale, especially if the Executor selling the
property is particularly removed from the property, for example a lawyer acting
in the role who is not related to the family and knows little if anything about the
property or the person who lived there. The protections provided are somewhat
limited and mainly focused around the title to the property. Moreover, a sale with
limited title can be off putting for buyers and raise suspicions about the property
transactions, so it should be used with care and discussed with your legal
representative.
Distributing the Estate

For most Executors, the completion of a property sale will probably mark the end
of the process of monetising the Estate and drawing the cash together in one
place. At this point, all the assets of the Estate have been liquidated (turned into
cash), though perhaps there are also heirlooms like jewellery and paintings that
need to be shared out, and of course this a point at which conflict may arise
between the beneficiaries.
If there is a Will, it has hopefully been written in such a way that clear and
precise instructions have been given on how the Estate should be distributed.
This may be done on a percentage basis, for example a 50% split between two
beneficiaries, or a statement that specific amounts are to be given to named
individuals. The later is fine so long as their money in the Estate to pay them,
there is no requirement for the Executor to personally guarantee these amounts,
beyond what the Estate can actually pay.
If you have taken my earlier advise and arranged a single account for the Estate
finances that is not muddled with any other money, it should be relatively
straightforward to make the necessary calculations and make the payments to
the named beneficiaries. Given you may be dealing with very large amounts of
money, a means of payment that tracks and confirms the payment has been
made (e.g. cheque or bank transfer) is preferable over a sack of cash for which
no receipt is given. If making a bank transfer it may be advisable to first transfer
a token amount, such as £1, to confirm the bank details are correct and will
reach the intended recipient.
The position of Executor is highly responsible one, with the potential to obtain
considerable legal powers that grant control over large amounts of money,
however this responsibility also means that other parties such as beneficiaries,
and HMRC, may hold the Executor financially liable for mistakes or bad practice.
In addition to honest and meticulous management of the inheritance tax and
Probate work, a further defence is to keep detailed records of what you have
done, and the paperwork that other parties send you, such as Estate agents
valuations. The rules on how long records must be kept is always subject to
change by the Government, but the present guidance seems to be that records
should be kept for 20 years. On these sort of timelines, you may be as well to
keep the records for as long as you live yourself.
If you do receive a legal challenge over your work, perhaps from a beneficiary
who feels they have not been fairly treated, you should probably seek your own
professional legal advice, unless you feel confident enough to at least attempt
your own resolution. In that latter case, at least keep a records or anything that
is agreed, and have the other party sign the agreement.
Conclusion

In summary, provided the Estate is not too complex, it is possible for the
organised and honest person, who is reasonably financially literate, to complete
both the inheritance tax and Probate work themselves, and deal with both HMRC
and MHCTS without calling in specialist help, at least until the point that a
property sale arises, at which point specialist legal assistance is needed to
manage the sale.
The potential to save money is one obvious reason to do the work yourself. The
cost of professional support may vary with the size and complexity of the Estate,
but could easily cost thousands of pounds. The insertion of a third party also
adds another layer to the process. If you hire a lawyer they will have to ask you,
and potentially other people and organisations questions. This sort of
correspondence involves a certain degree of ‘back and forth’ and of course may
generate follow up queries and a further round of correspondence that may
iterate for another round or two, all the time racking up additional costs, unless
you have negotiated a flat fee, but in any case probably adding a significant time
delay to the process relative to what you could have achieved yourself (assuming
of course you made no errors that needed correcting later). There is a further
motivation beyond that financial, in that many people prefer to do things
themselves, and achieve a personal satisfaction in overcoming the problems
presented along the way.
The viability of a purely DIY approach very much depends on one’s personal view
of the complexity of the Estate, and how confident one feels in tackling the
complexity. This is not a process you want to get wrong, because mistakes can
cost you a lot of time and money, so there is no shame in handing the whole
business over to a professional. Be advised though that these professionals will
probably still require you to find and provide lots of information to complete the
work on your behalf.
The complexity of the work can vary enormously. At the simplest end of the
spectrum, an Estate might comprise only a small amount of cash that can be
managed with only a Death Certificate and a Will, not requiring any inheritance
tax work with HMRC, nor any work with HMCTS to obtain a Grant of Probate. At
the other end of the spectrum, the Estate might comprise millions of pounds in
various bank accounts around the world, shares in complex unlisted businesses
registered in different countries, property ownership in different nations, farm
ownership, and so on. As one journeys along this spectrum, the complexity of
managing the Estate increases, and so does the potential for making costly
mistakes. There comes a point, and this varies between individuals, when one’s
own ability to manage the Estate is not sufficient for the challenges, and it
becomes more prudent to bring in experienced and qualified tax professionals
who are specialists in the challenges you are facing. If you are having doubts
about your competence at a particular stage in the process, one option, provided
you have the patience to wait on hold, is to phone HMRC or HMCTS, explain your
position and understanding, and see if they agree.
I hope you have enjoyed reading this guide and more importantly found it
practical and helpful. Given this is a new initiative, I am not sure how many
copies will be sold. If, as I hope, I am able to issue an updated guide for the next
tax year (2025-26) I will have a better idea of the public interest in this work. At
the time of writing a new Labour Government has been elected. While rumours
are swirling about what changes they may make to the tax system, including
perhaps inheritance tax and Probate, but has yet to release a formal budget that
confirm what, if any changes will be enforced. These periodic financial and legal
reviews and changes by the Government are why tax advice can quickly go out
of date, and needs to be updated to be kept relevant.
Any profits generated will be given to charity, or range of charities, connected
with helping other people struggling with bereavement problems.