What is form IHT205?SmartWill
Form IHT205 is a return that is made to HMRC to inform them of the value of an estate where it is below the excepted value or where all of the assets totalling less than £1m are passed to their spouse or a charity.
The form is needed where there is no inheritance tax to pay but you still need to obtain a grant of probate and is completed by the executor or administrator of the estate.
When can you use form IHT205?
The form can only be used if there is no inheritance tax to pay and this will be because;
The estate is valued at less than the inheritance tax threshold (known as the excepted amount) which is currently £325,000.
The estate is valued at less than £1m but all of the assets are passed to the spouse of the deceased or their civil partner
The estate is valued at less than £1m but all of the assets are passed to a charity or other qualifying body.
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What is included in IHT205?
There are fifteen elements in total but many of these have sub-questions that you will need to answer.
1 – About the person who has died. This section includes fairly basic questions about the person such as their name and occupation but also their National Insurance number etc and so you will need to do some research here.
2 –4 Are all about the estate. This section looks at gifts given in the 7 years before death and asks about gifts made before death that the deceased continued to benefit from.
5 – Is asking whether there are any assets outside the UK that the deceased benefitted from.
6 – This is where you will identify if the deceased paid into any life insurance policies that weren’t the benefit of either themselves or their spouse or civil partner.
7 & 8 – Asks whether the deceased had a pension other than the normal state pension and whether the gave up any of the benefit of the plans in the 2 years before death.
9 – This is where the assets that are included in the estate are listed. This section is split down into several subsections allowing the assets to be properly categorised.
10 – In this question, the debts that are payable by the estate out of the assets listed in section 9 are listed and again this is split down into several subsections depending upon the type of debt.
11 – This is the section where other assets of the estate are listed, this includes cash, shares, any household goods and property and also includes any money that is owed to the deceased.
12 – In section 12 you list the debts payable from the assets in section 11. The most likely of these would be funeral costs but also any outstanding mortgage and other debts.
13 – this is a catch-all box that asks you to declare anything that hasn’t already been asked about but also gives you the chance to tell HMRC of anything else you would like taken into account.
14 – Is an important box as it allows you to list any exemptions that you would like to claim. In particular, an exemption for assets passed to a spouse or charity.
15 – The last section is a declaration that is signed by the executor stating that the form is true and accurate to the best of their knowledge.
As we can see, there is quite a large amount of information required for IHT205 and it is important to make sure all of the questions are answered to the fullest extent and truthfully, naturally.
It’s important to make sure you are organised and that you make copies of everything you send.