Inheritance Tax and the IHT400 form

If you need to pay Inheritance Tax, you will need to fill in the IHT400 form. There are also a few scenarios when you need to use this form even if there’s no tax to pay. We share in what scenarios you do not need to pay Inheritance Tax and give advice on filling in the IHT400 form if you need it.

There’s normally no Inheritance Tax to pay if any of the following 4 things are true:

•  the estate passes in full to the person’s spouse or civil partner, a charity or a community amateur sports club
• the estate is worth less than the Inheritance Tax threshold of £325,000
• everything above the £325,000 threshold is left to a spouse, civil partner, or a charity
• the deceased had a spouse/civil partner that died first and left everything to them, and the value of the estate you are dealing with is less than £650,000 (you will need to use the IHT217 form to use their tax allowance for deaths prior to the 1st of January 2022)

If the person who died is giving their home to their children or grandchildren, the tax threshold can be higher.

Even if there’s no inheritance tax to pay, you may still have to fill in the IHT400 form.

Although it can be quite consuming, the guidance notes for filling in the IHT400 and the associated schedules are good as they were updated a few years ago to make them easier to follow. HMRC will provide help over the phone and do any tax calculations for you.

If you need to use these forms, you will need to submit them to HMRC before you can apply for confirmation. HMRC will want to see a copy of your C1 form at the same time, so it would be best to complete this in parallel. 

When HMRC are satisfied you’ve filled in the forms correctly, they will issue you with a letter containing an authorisation code. This letter should be included with your application when you apply for confirmation from the Sheriff Court.

If there’s tax to pay, you normally have to pay at least some of it before HMRC will issue the authorisation code needed to apply for confirmation. You can ask the deceased’s bank to pay HMRC directly using the IHT423 form. 

If there’s no money readily available, it is possible to arrange different types of payment plans with HMRC. If you can’t pay it now, you may need to take out an inheritance tax loan.

Read more about inheritance tax on the GOV.UK website

Unlike the IHT forms, the Scottish confirmation process is very poorly designed. The official guidance for the C1 form is ambiguous and missing key components. This means that, although you may feel like you have followed all the instructions, it is almost certain you will be rejected with no explanation of why. 

We created our Probate Support Service to help you get it 100% right.