Fillable Form 1: Inheritance Tax account (Cabinet Office)

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Form 1: Inheritance Tax account (Cabinet Office)

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IHT400 Calculation Page 1 HMRC 12/19
Inheritance Tax account
IHT400 Calculation
When to use this form
Fill in this form if you’ve already filled in the form IHT400
up to and including box 109 and the simple calculation is
not suitable.
Gifts and other transfers of value
If the deceased made any gifts or other transfers of value in the 7 years before they died, the chargeable value of these
gifts and transfers will reduce the amount of the Inheritance Tax nil rate band available to the estate on death.
Fill in the boxes below to find out the amount of the nil rate band available on death.
Calculation of Inheritance Tax
Help
For more information or help:
• go to www.gov.uk/inheritance-tax
• telephone our helpline on 0300 123 1072 – if calling from
outside the UK, telephone +44 300 123 1072
1
Inheritance Tax nil rate band at the date of death
See IHT400, ‘Rates and tables’
£
2
Transferable nil rate band (Schedule IHT402, box 20)
£
3
Total nil rate band at the date of death (box 1 + box 2)
£
4
Total chargeable value of gifts and other transfers of value
made by the deceased within the 7 years before their death
(Schedule IHT403, box 7). Do not include gifts with reservation
here, include them on the IHT400, box 104 instead.
£
5
Balance of Inheritance Tax nil rate band available
(box 3 minus box 4) (if this figure is a minus, enter ‘0’ in box 5)
£
6
Total chargeable estate (copy from form IHT400, box 108)
£
7
Residence nil rate band due, including any transferred amount
(Schedule IHT435, box 25)
£
8
Inheritance Tax nil rate band available (copy from box 5)
£
9
Value chargeable to tax (box 6 minus box 7 minus box 8).
If the result is a minus amount enter ‘0’. If the figure is ‘0’ do not
fill in any more of this form, go to form IHT400, box 121.
£
10
Inheritance Tax (box 9 x 40%)
£
•
Successive charges relief
If in the 5 years before they died, the deceased inherited money or assets from another person’s estate on which Inheritance Tax
was paid, you may deduct successive charges relief to stop that legacy being taxed twice in a short period of time.
11
Is successive charges relief due?
No
Enter ‘0’ in box 18 and go to box 19
Yes
Follow the instructions below for working out successive charges relief
You’ll need to find out the value of the estate of the first person to die and the amount of Inheritance Tax paid in order to
work out the relief due. You’ll also need to know what the deceased was entitled to receive from the estate. You can find out
this information by asking the executor of the estate of the first person to die.
If you’re deducting successive charges relief enter:
• the Inheritance Tax reference of the first person to die
• their full name
• their date of death
in the ‘Additional information’ boxes on page 16 of form IHT400.
Page 2 IHT400 Calculation
How much Inheritance Tax was paid on the estate of the first
person to die?
What was the net value of the estate of the first person to die,
after deducting liabilities and exemptions?
Box 12 ÷ box 13
What was the deceased’s entitlement from the estate of the first
person to die?
Box 14 x box 15
The amount of relief available depends on the number of years between the first and second deaths
and is shown in the table.
For example, if the second death was on 3 March 2007 and the first death was on 17 August 2005, there is
more than one year between the 2 deaths, but less than 2 years, so the percentage reduction would be 80%.
Enter the percentage reduction
The amount of successive charges relief due:
box 16 x box 17.
•
.
Years between the 2 deaths Percentage reduction
1 year or less 100%
1 to 2 years 80%
2 to 3 years 60%
3 to 4 years 40%
4 to 5 years 20%
Over 5 years 0%
14
18
%
17
16
15
13
•
•
•
•
£
£
£
£
£
12
£200,000 x 0.0294 = £5,880
This is the amount of Inheritance Tax
paid on the deceased’s share of the
estate of the first person to die.
You now need to look at how much
relief is due on that amount of tax.
If there were between one and 2 years
between the 2 deaths, then the table
shows that the percentage reduction
would be 80%.
£5,880 x 80 ÷ 100 = £4,704.
This is the amount of successive charges
relief that is due.
Successive charges relief — Example 1
10,000 0 0
340,000 0 0
0 0 2 9 4
200,000 0 0
5,880 0 0
80
4,704 0 0
£10,000 ÷ £340,000 = 0.0294
12
How much Inheritance Tax was paid on the estate of the first
person to die?
£
•
13
What was the net value of the estate of the first person to die,
after deducting liabilities and exemptions?
£
•
14
Box 12 ÷ box 13
.
15
What was the deceased’s entitlement from the estate of the first
person to die?
£
•
16
Box 14 x box 15
£
•
The amount of relief available depends on the number of years between the first and second deaths
and is shown in the table.
Years between the 2 deaths Percentage reduction
1 year or less 100%
1 to 2 years 80%
2 to 3 years 60%
3 to 4 years 40%
4 to 5 years 20%
Over 5 years 0%
For example, if the second death was on 3 March 2007 and the first death was on 17 August 2005, there is
more than one year between the 2 deaths, but less than 2 years, so the percentage reduction would be 80%.
17
Enter the percentage reduction
%
18
The amount of successive charges relief due:
box 16 x box 17.
£
•
19
Inheritance Tax on the chargeable estate (box 10 minus box 18)
£
•
IHT400 Calculation Page 3
Tax that may be paid by instalments
The tax on some types of unsold property and assets may be paid in 10 annual instalments, that is, one instalment
per year for 10 years. The property and assets on which tax may be paid in this way are unsold houses, land, buildings,
some types of shares and the net value of a business or an interest in a business after deduction of Business Relief.
These assets and properties are listed on pages 7 and 8 on form IHT400 in column B. The total value of the assets on which
you may pay the tax by instalments is on form IHT400, box 95, plus box 97 + box 99 (if any) .
As soon as any of the property or assets are sold you’ll have to pay all the remaining tax. If you choose to pay tax
by instalments on these assets you’ll have to pay interest on the outstanding tax.
20
Property and assets on which instalments of tax may be available
(form IHT400, box 95 + box 103).
£
21
Value of property and assets shown in column B of form IHT400
which have been sold or on which you wish to pay the tax now
and not pay by instalments (these may be assets at boxes 49, 51,
66, 67, 68, 69, 70 or 71). Enter the total of these assets which
have been sold and you wish to pay the tax on now.
£
22
Value of property and assets shown in column B of form IHT400 on
which the tax is being paid by instalments (box 20 minus box 21).
If the answer is ‘0’, enter ‘0’ in box 27 and go to box 40)
£
Instalments due now
You only need to work out the tax that is being paid by instalments if the due date for the first instalment has passed or is less
than 30 days away. Otherwise you can miss out boxes 23 to 39 and go straight to box 40. The first instalment of tax is due on
the last day of the sixth month after the date of death. For example, the deceased died on 17 July 2007, the due date for the
payment of the first instalment is 31 January 2008. The table of due dates below will help you to work out the due date.
Month of death Due date
January 31 July
February 31 August
March 30 September
April 31 October
May 30 November
June 31 December
July 31 January
August 28/29 February
September 31 March
October 30 April
November 31 May
December 30 June
23
What is the instalment due date? DD MM YYYY
24
Has the instalment due date passed or is it less than 30 days away?
No
Write ‘0’ in box 25 and then go to box 40
Yes
Go to box 25
25
How many of the 10 instalments are due now?
26
Box 22 ÷ box 6 .
27
Box 26 x box 19. This is the tax that can be paid by
instalments before any double taxation relief is deducted.
£
•
28
Did the form IHT400 include any unsold foreign houses, land, businesses or control holdings (form IHT400, box 97)?
No
Copy the figure from box 27 into box 37. Continue from box 38
Yes
Read the information about double taxation relief on the next page
Page 4 IHT400 Calculation
Double taxation relief — Example 2
Value of unsold foreign houses, land, businesses and
control holdings on which foreign tax has been paid
(form IHT400, box 97, £ sterling)
Inheritance Tax on the chargeable estate (copy from box 19)
Total chargeable estate (copy from box 6)
Box 31 ÷ box 32
Box 30 x box 33
Foreign tax paid on the unsold foreign houses, land, businesses
and control holdings (£ sterling)
The relief is the lower of boxes 34 and 35.
Write the lower amount in here.
£
•
£
•
£
•
£
•
.
36
35
34
33
£
32
£
31
30
£12,000 ÷ £330,000 = 0.0364
0.0364 x £20,000 = £728
Compare the 2 figures in boxes 34
and 35. The double taxation relief due
is the lower of the figures in boxes 34
and 35. £728 is lower than £2,000
so £728 is the double taxation relief on the
unsold foreign houses, land and buildings.
Enter that figure in box 36.
The foreign tax paid was £2,000 so enter
that figure in box 35.
20,000
12,000 0 0
330,000
0 0 3 6 4
728 0 0
2,000 0 0
728
Double taxation relief
If foreign tax equivalent to Inheritance Tax was paid on the value of foreign assets, double taxation relief may be due if there
is a double taxation convention between the UK and the other country. If there is no convention, we may still be able to give
‘unilateral relief’. For more information about double taxation relief go to www.gov.uk/inheritance-tax
If you wish to claim double taxation or unilateral relief, enclose with form IHT400 a ‘certificate of tax paid’ from the overseas tax
authority, if you already have one, showing the amount of foreign tax paid. We may ask more questions about the claim after the
Grant is issued. You must also fill in schedule IHT417, ‘Foreign assets’ detailing the assets outside the UK.
29
Is double taxation relief due on the unsold foreign houses, land, businesses and control holdings of shares?
No
Copy the figure from box 27 into box 37. Continue from box 38
Yes
Go to box 30
30
Value of unsold foreign houses, land, businesses and
control holdings on which foreign tax has been paid
(form IHT400, box 97, £ sterling)
£
31
Inheritance Tax on the chargeable estate (copy from box 19)
£
•
32
Total chargeable estate (copy from box 6)
£
33
Box 31 ÷ box 32 .
34
Box 30 x box 33
£
•
35
Foreign tax paid on the unsold foreign houses, land, businesses
and control holdings (£ sterling)
£
•
36
The relief is the lower of boxes 34 and 35.
Write the lower amount in here.
£
•
37
Net tax to be paid by instalments (box 27 minus box 36).
If no double taxation relief is being deducted, copy the value
from box 27 here
£
•
38
Divide the amount in box 37 by 10 to work out how much
each of the 10 instalments of tax should be.
Enter the answer here.
£
•
39
Tax that may be paid by instalments that is being paid now.
Multiply the amount in box 38 by the number of instalments
that are due now (box 25). Enter the answer here. Go to box 40.
£
•
IHT400 Calculation Page 5
Tax that isn’t being paid by instalments
Inheritance Tax may only be paid by instalments on unsold houses, land, businesses and on certain types of shares.
The Inheritance Tax on all sold houses, land, businesses, shares and all other types of assets, such as bank accounts
and household and personal goods must be paid when you send this form to us. You can also choose to pay all of the tax now.
40
Property and assets on which instalments aren’t available
(IHT400, box 94 + IHT400, box 102 + IHT400, ‘Calculation’, box 21).
If the answer is 0, write ‘0’ in box 42 and go to box 54.
£
41
Box 40 ÷ box 6 .
42
Box 41 x box 19. This is the tax that cannot be paid by
instalments before any double taxation relief is deducted.
£
•
43
Did the form IHT400 include any sold foreign houses, land, businesses and control holdings (form IHT400, box 97)
or other foreign assets (form IHT400, box 98)?
No
Copy the figure from box 42 into box 54, then continue from box 55
Yes
Read the information about double taxation relief on page 4 then go to box 44
Double taxation relief
See the note about double taxation relief at the top of page 4.
44
Is double taxation relief due on the sold foreign houses, land, businesses and control holdings, and other foreign assets?
No
Copy the figure from box 42 into box 54, then continue from box 55
Yes
Go to box 45
For an example of how to work out double taxation relief, see Example 2 on page 4
45
Value of any sold foreign houses, land, businesses and
control holdings (form IHT400, box 97) on which foreign tax has
been paid (£ sterling)
£
46
Value of other foreign assets on which foreign tax has
been paid (form IHT400, box 98, £ sterling)
£
47
Total foreign property on which the tax is not
being paid by instalments (box 45 + box 46, £ sterling)
£
48
Inheritance Tax on the chargeable estate (copy from box 19)
£
•
49
Total chargeable estate (copy from box 6)
£
50
Box 48 ÷ box 49 .
51
Box 50 x box 47
£
•
52
Foreign tax paid on the foreign property and assets on which
the tax is not being paid by instalments (£ sterling)
£
•
53
The relief is the lower of boxes 51 and 52. Write the lower
amount here.
£
•
54
Net tax that isn’t being paid by instalments:
• box 42 minus box 53
• if no double taxation relief is being deducted, copy the value
from box 42 into box 54 (If box 42 was 0, enter ‘0’ here)
£
•
Page 6 IHT400 Calculation
Interest
Inheritance Tax is due to be paid on the last day of the sixth month after the date of death. Interest will be due even if you
have not got a Grant by then. Interest will also be due even if we have not contacted you or anybody else (for example, the
trustees of a trust or someone who received a gift from the deceased). The law says that interest will be added to any unpaid tax
after this date. Interest is not a penalty, it compensates the Exchequer for the delay in receiving the money due to it. If you pay
too much tax, we pay interest on the repayment to you.
Interest starts on the first day of the 7th month after the date of death. For example, if the deceased died on 17 July 2007,
interest will be due from 1 February 2008 on all unpaid tax whatever the reason the tax has not been paid. The table below will
tell you the date that interest starts.
Month of death Interest starts from
January 1 August
February 1 September
March 1 October
April 1 November
May 1 December
June 1 January
July 1 February
August 1 March
September 1 April
October 1 May
November 1 June
December 1 July
55
What is the date interest starts? 01 MM YYYY
0 1
If the tax is being paid after this date you must add interest to the tax being paid.
56
Has the date at box 55 passed, or is it likely to pass before you pay the tax?
No
Enter ‘0’ in boxes 58, 59, 61 and 62 then go to box 63
Yes
Go to box 57 to work out the interest due
Working out interest using the online interest calculator
57
The easiest way to work out the interest due is to use the interest calculator which you can find on our website.
Go to www.hmrc.gov.uk/tools/inheritancetax/interest-rate-calculator.htm
If you use the interest calculator you should work out the interest on the tax that is being paid by instalments
(box 39) and the tax that isn’t being paid by instalments (box 54).
Do you wish to use the interest calculator to work out the interest due?
No
Go to the IHT400 Helpsheet, ‘Working out the interest on Inheritance Tax payments’
and follow the instructions there
Yes
Go to box 58
IHT400 Calculation Page 7
58
Interest on tax that isn’t being paid by instalments
You only need to do this calculation if the figure in box 54 is greater than 0:
• for the interest calculator, go to www.hmrc.gov.uk/tools/inheritancetax/interest-rate-calculator.htm
• in the ‘start date for interest’ box on the calculator enter the date from box 55
• in the ‘end date for interest’ box on the calculator enter the date you expect to be sending in the IHT400
• in the ‘Inheritance Tax owed’ box enter the amount of tax not being paid by instalments from box 54
• use the ‘calculate’ button to find out how much interest is due
Enter the amount of interest here
£
•
59
Interest on tax that’s being paid by instalments
You only need to do this calculation if the figure in box 39 is greater than 0:
• for the interest calculator, go to www.hmrc.gov.uk/tools/inheritancetax/interest-rate-calculator.htm
• in the ‘start date for interest’ box on the calculator enter the day after the date the most recent instalment became due
— if there’s only one instalment due (the figure in box 25 is ‘1’), this date will be the date in box 55
— if 2 instalments are due, the start date will be one year on from the date in box 55 and so on
• in the ‘end date for interest’ box on the calculator enter the date you expect to be sending in the form IHT400
• in the ‘Inheritance Tax owed’ box enter the amount of tax being paid by instalments from box 39
• use the ‘calculate’ button to find out how much interest is due
Enter the amount of interest in here
£
•
60
Is ‘1’ the number in box 25?
No
Go to box 61
Yes
Enter ‘0’ in box 61 and go to box 62
61
Additional interest on tax that’s being paid by instalments when more than one instalment is due
When more than one instalment of tax is due, you’ll have to work out an additional amount of interest
unless the instalments of tax are interest-free.
Interest-free instalments
Instalments of tax are interest-free for certain types of assets as long as the instalments are paid on time.
The assets on which the instalments are interest-free are:
• shares or securities, except shares in an investment or property company, which will only qualify if the company is
— a holding company of companies, which aren’t investment or property companies
— a market maker or discount house in the UK
• a business or interest in a business carried on for gain
• land which qualifies for agricultural relief
• timber
It would be a very unusual situation if you need to work out the interest on these types of assets where the instalments
are being paid late. The IHT400 Helpsheet, ‘Working out the interest on Inheritance Tax payments’ explains what to do:
• if the instalments are not interest-free (and most won’t be) – for the interest calculator,
go to www.hmrc.gov.uk/tools/inheritancetax/interest-rate-calculator.htm
• in the ‘start date for interest’ box on the calculator enter the date from box 55
• in the ‘end date for interest’ box on the calculator enter the date the most recent instalment became due
• in the ‘Inheritance Tax owed’ box enter the total amount of tax being paid by instalments from box 37
• use the ‘calculate’ button to find out how much interest is due
Enter the amount of interest here (This is the figure for box 61)
£
•
Page 8 IHT400 Calculation
Taper relief
If there is additional tax to pay on lifetime gifts, taper relief may be available. This will apply in the following circumstances:
• the total value of gifts must be more than the Inheritance Tax nil rate band
• the gifts must have been made between 3 and 7 years before the deceased died
The relief reduces the amount of tax payable on a gift, not the value of the gift itself.
For more information about taper relief go to www.gov.uk/inheritance-tax
Trusts
If the deceased benefited from any assets held in trust shown on Schedule IHT418 and the trustees have not paid the tax with
this account, more tax will be due. We’ll send a calculation of the tax to the trustees named on the Schedule IHT418.
If there are amendments made to the value of the trust assets or the value of the deceased’s estate this will affect both the tax
due on the trust assets and the tax due on the deceased’s estate. If this is the case, we’ll send you more calculations of tax.
What to do when you’ve filled in this form
If you’re filling in this form without the help of a solicitor, another person licensed to provide probate services or other adviser,
send the form to us with your form IHT400 so that we can see how you’ve worked out the tax. Continue filling in the form IHT400
from box 120.
If you’re a solicitor, another person licensed to provide probate services or other adviser, you do not need to send this form to us
if you do not want to, but if you’ve included an amount of successive charges relief in box 18 or double taxation relief in
boxes 36 or 53, send this form to us with the form IHT400 so that we can see how these reliefs were worked out.
Tax payable on gifts and lifetime transfers
The tax and interest shown at box 65 is the tax and interest which is payable now in order for you to be able to obtain a grant of
representation. Depending on the circumstances of the estate, there may be more tax and interest to pay by the person(s) who
received lifetime gifts from the deceased. We may also ask the person(s) who received the gifts for more details of the gifts on a
separate account.
If the deceased made lifetime gifts which were over the Inheritance Tax nil rate band or gifts with reservation, more tax will be
payable and we’ll send calculations of the tax when you’ve sent this form to us. But you should bear in mind that interest becomes
payable if the tax isn’t paid on time. To find out how lifetime gifts are taxed on death, go to www.gov.uk/inheritance-tax
For example, the deceased died on 6 July 2005. The date tax is due is 31 January 2006. The tax being paid
by instalments is £10,000. The first instalment of £1,000 is due on 31 January 2006, the second instalment
on 31 January 2007 and so on. The application for a Grant was made on 18 June 2007, so that 2 instalments
had to be paid at that time. The ‘end’ date in this example would be 31 January 2007.
In the ‘Inheritance Tax owed’ box enter the total amount of tax being paid by instalments (from box 37). In this
example this will be £10,000.
62
Total interest on tax being paid by instalments (box 59 + box 61)
£
•
63
Total tax and interest payable now where the tax is being paid
by instalments (box 39 + box 62)
£
•
64
Total tax and interest which isn’t being paid by instalments
(box 54 + box 58)
£
•
65
Total Inheritance Tax and interest on the estate being paid now
(box 63 + box 64)
£
•
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Form 1: Inheritance Tax account (Cabinet Office)

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Completed 6 September 2021

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