IHT400: the Inheritance Tax account

Who needs it

• Executors or administrators of an estate where Inheritance Tax is due.
• Executors of an estate with no tax to pay that still isn't an excepted estate, for example because of large gifts in the 7 years before death, trust assets or an estate above the excepted-estate limits.
• Executors who want to claim a late spouse's or civil partner's unused nil-rate band or residence nil-rate band where the estate doesn't qualify as excepted.

What you need before you start

• Values at the date of death for every asset: property, bank and savings accounts, investments, pensions, household and personal goods.
• Debts and funeral costs that can be deducted.
• Details of gifts made in the 7 years before death, and of any trusts the person benefited from.
• The supplementary schedules that apply (numbered from IHT401), such as IHT402 or IHT435 for transferred or residence nil-rate band claims.
• An Inheritance Tax reference from HMRC, applied for at least 3 weeks before you pay.
• The current IHT400 PDF from GOV.UK and the latest free Adobe Reader: the form can't be saved part-completed.

How to file IHT400

1. 1Check the type of estate on GOV.UK. If it's an excepted estate, you report its estimated value when applying for probate instead of filing an IHT400.
2. 2Gather every value before you start. The interactive form must be completed in one go on screen and printed at the end.
3. 3Complete the IHT400 and each schedule that applies, then work through the calculation to find the tax due.
4. 4Get an Inheritance Tax reference at least 3 weeks before paying, and start paying before applying for probate or confirmation.
5. 5Send the IHT400 and schedules to HMRC. In Scotland, enclose form C1; in Northern Ireland, enclose form IHT421.
6. 6Wait for HMRC's code confirming enough tax has been paid (usually within 20 working days of receiving the form or payment, whichever is later), then apply for probate or confirmation.

Full account or excepted estate

Most estates don't need an IHT400. GOV.UK's guidance on checking the type of estate says an estate is usually excepted if, for example, it's below the Inheritance Tax threshold (£325,000), or everything passed to a UK-resident spouse, civil partner or qualifying charity, subject to limits HMRC lists. An excepted estate reports its estimated value when applying for probate, even though there's no tax to pay.

Full details are needed when Inheritance Tax is due, and in some cases with no tax due, such as large gifts in the 7 years before death or a very large estate. HMRC's checker sets out each condition.

The schedules

The IHT400 is the main account. Supplementary forms numbered from IHT401 cover particular assets and claims: gifts, houses and land, pensions, foreign assets, and the claims to transfer a late spouse's unused nil-rate band (IHT402) or to claim the residence nil-rate band (IHT435 and IHT436). You only complete the ones that apply.

HMRC's Inheritance Tax forms collection lists every schedule with its own notes.

Deadlines, payment and interest

GOV.UK says to submit the IHT400 within 12 months of the death and before applying for probate. A penalty can apply if you miss it without a reasonable excuse.

Tax is due by the end of the sixth month after the death: if the person died in January, pay by 31 July. Interest runs on tax paid late, and HMRC works out any interest after you submit. If a value changes later, a payment on account stops further interest building up. The standard rate is 40% on the estate above the available thresholds.

Scotland and Northern Ireland

In Scotland, executors apply for confirmation rather than probate. HMRC's code is a confirmation code, the estate inventory goes on form C1, and changes to values are reported on the corrective inventory C4(S) rather than C4.

In Northern Ireland, you complete IHT421 and send it with the IHT400. HMRC completes its part and returns it, and you need it to apply for probate there.

Common mistakes

• Starting the form without all the figures to hand. A part-completed IHT400 can't be saved.
• Trying to pay before getting an Inheritance Tax reference. HMRC asks for it at least 3 weeks before payment.
• Applying for probate or confirmation before HMRC's code has arrived.
• Sending original documents. HMRC's form page says not to.
• Leaving out a transfer claim (IHT402 or IHT436) for a spouse or civil partner who died first, which can mean paying more tax than needed.
• Using the England and Wales route for a Scottish estate. Scotland uses form C1 and a confirmation code, and corrections go on form C4(S).