When someone dies, the executor has many duties. One of them is to ensure that the full Inheritance Tax (IHT) allowances have been claimed.
Although an additional nil rate band has been introduced, it has brought with it and additional layer of complexity.
Here’s an extract from one of the additional forms that are now required to claim the Residential Nil Rate Band. You will need to know the facts about the estate as well as the deceased’s information.
“Use this form to claim transferable residence nil rate band (TRNRB) against the inheritance tax on the deceased’s estate. Complete this form if:
- you are claiming residence nil rate band (RNRB) in this estate (you will need to complete form IHT435)
- the deceased had a spouse or civil partner that died before them, and that spouse or civil partner either died before 6 April 2017, or died after that date “
Deceased’s surname
Deceased’s first name(s)
Date of death DD MM YYYY
Inheritance Tax reference number
Spouse or civil partner’s details
1 Title
- Mr, Mrs, Miss, Ms or other title
- Surname or family name
- First name(s)
2 Date of marriage or civil partnership DD MM YYYY
3 Place of marriage or civil partnership Name of building, church, or register office and locality
4 Date of death of spouse or civil partner DD MM YYYY
5 Inheritance Tax reference number for spouse or civil partner’s estate
6 Was any RNRB used in the estate of the spouse or civil partner?
7 Total value of spouse or civil partner’s estate before exemptions or reliefs £ 0 0•
8 Value of the taper threshold at the spouse or civil partner’s date of death (see Note 4 page 3) £ 0 0• If the value at question 7 is less than the value at question 8, enter 100.0000% in box 13 and go on to question 14. If the value at question 7 is more than the value at question 8 continue to question 9
9 Deduct the value at question 8 from the value at question 7 £ 0 0•
10 Divide the value at question 9 by 2 £ 0 0• This is the amount of tapering that applies
11 Enter the value of the Residential Enhancement at the spouse or civil partner’s date of death (see Note 1 on page 3) £ 0 0•
12 Deduct the value at question 10 from the value at question 11 £ 0 0• This the unused RNRB from the earlier death. If this value is negative, there is no unused RNRB available to transfer and you have finished completing this form
13 Divide the value at question 12 by the value at question 11 and multiply by 100. Use 4 decimal places %• This is the proportion of RNRB treated as being unused on the death of the spouse or civil partner. (This can’t exceed 100.0000%) 14 Enter the value of the residential enhancement at the deceased’s date of death (see Note 1 on page 3) £ 0 0•
15 Multiply the value at question 14 by the percentage at question 13
16 What was the ‘Default Allowance’ or the ‘Adjusted Allowance’ on the death of the spouse or civil partner? (see Note 5 on page 3) £ 0 0•
17 What was the amount of RNRB actually used on the spouse or civil partner’s estate? £ 0 0•
18 Deduct the value at question 17 from the value at question 16 £ 0 0• This is the unused RNRB from the earlier death 19 Divide the value at question 18 by the value at question 16 and multiply by 100. Use 4 decimal places %• This is the proportion of RNRB treated as being unused on the death of the spouse or civil partner
20 Enter the value of the Residential Enhancement at the deceased’s date of death (see Note 1 on page 3) £ 0 0•
21 Multiply the value at question 20 by the percentage at question 19 £ 0 0• This is the amount of RNRB available to transfer
I would recommend that at the time of completing a review of your wills, you open a file to start gathering the information and relevant birth, death, and marriage certificates to one place so that you are not leaving an expensive nightmare for your executors to sort out. If you are being asked to be an executor, you need to have a discussion with the testator (person making the will) about where to find all the information and where the will is stored.
If you would like help and guidance in this process please call me on 079 888 30691
or message to kent@lifetimetrustees.com.
Submit your review | |