Inheritance Tax
Probate and Inheritance Tax Explained
Inheritance Tax (IHT) is one of the most misunderstood aspects of Probate. Many people assume it is a straightforward percentage applied to everything a person owns. In reality, the rules around what is taxable, what is exempt, and what allowances apply make IHT one of the more complex areas of UK tax.
What is Inheritance Tax?
Inheritance Tax is a tax on the value of a deceased person’s estate above a certain threshold. The current standard rate is 40% on the portion of the estate that exceeds the applicable nil rate band. Most estates do not end up paying Inheritance Tax.
The Inheritance Tax threshold: the nil rate band
Every individual has a nil rate band of £325,000. This is the amount that can pass free of IHT. The nil rate band has remained at this level since 2009 and is frozen until at least April 2030.
The Residence Nil Rate Band
An additional allowance of up to £175,000 is available where a residential property is left to a direct descendant such as a child or grandchild. This is the Residence Nil Rate Band (RNRB). Combined with the standard nil rate band, individuals may be able to pass up to £500,000 free of IHT where a qualifying property is involved.
Transferring allowances between spouses
When a married person or civil partner dies and leaves everything to their surviving spouse, no IHT is due. Any unused nil rate band and RNRB can be transferred to the surviving spouse’s estate, potentially doubling the allowances available on the second death.
Gifts and the seven-year rule
Gifts made during the deceased’s lifetime may be relevant to the IHT calculation. Some gifts are exempt regardless of when they were made. Others are potentially exempt transfers (PETs) and fall outside the estate only if the person who made them survived for seven full years afterwards.
Which HMRC form is required?
Most estates are excepted estates and need no HMRC form at all: the estate’s values are entered directly on the Probate application. Where the estate is not excepted, which can be the case even when no Inheritance Tax is due, the IHT400 is completed and sent to HMRC before the Probate application. The IHT400 is accompanied by supplementary schedules covering specific categories of assets and specific exemptions or reliefs.
How does YouCanDoProbate handle IHT?
As you enter information about the estate, YouCanDoProbate performs every calculation, determines which exemptions and reliefs apply, and populates every relevant section of the IHT400 and its schedules. The platform was independently assessed by the ICAEW to confirm its accuracy and compliance. You supply the facts; the platform applies the rules.
The easy and affordable way to apply for probate
Related articles
This is an exceptional service.We were quoted over £7000.00 from solicitors .The process for us was very straight forward .The forms and support to complete the probate were provided and we could take our time to complete.Downloading was straight forward . Probate forms were sent off and Grant of probate received within 6 weeks. Highly recommend using this service . Thankyou.
Very easy to follow step by step instructions
The form was quite easy to follow. But the support from the staff was fantastic and very helpful.
I am so glad that I chose to invest in this software. It is a simple tool which guides you through the process in a very clear way. Firstly you can input the required information about the estate (which you would have to collate and provide to a solicitor anyway) and it then determines which forms need to be populated to apply for probate (and inheritance tax), and populates them correctly. It has saved us a lot of time and money . The customer support team are very knowledgeable, helpful and friendly, and easy to get hold of. Thank you for making this a smooth process at a difficult time. Our grant of probate was received today which was only 5-6 weeks after receipt of the application by the probate office at a time where the probate office are quoting 8 week lead times to acknowledge probate application receipt.
i recently used you can do probate and found the whole process quite straight forward , its a lot cheaper than engaging probate solicitors and the advice and support you can do probate offer is very good , if you need to book a call for advice you get it same day normally within the hour of booking it
The YouCanDoProbate portal made the whole process extremely straightforward and it was at a fraction of the cost of engaging a solicitor, or a probate consultancy service. And, it was quick… Thoroughly recommended!
I signed up with trepidation having never had to do this before!! However I managed all the form filling with ease and much to my surprise did not have to telephone for help once. I am 70 years of age and would not describe myself as a computer expert in anyway and am a bit of a dinosaur! I would not hesitate to use this service again and will certainly recommend it if asked. For the record I received official notification and paperwork from HMC and Justices that probate had been granted within 21 days of posting the forms. Perhaps I was lucky but this service was idiot proof and saved me the cost of a solicitor.
Straightforward and easy to use system. Definitely recommended.
Very easy to use; user friendly, good people to deal with, very helpful, great software, well designed
I’ve used the online tool on two occasions now and personally I believe its the best around. The system is both easy to use and very intuitive and the aftersales is second to none. Well done and congratulations for bring this tool to the masses.
Straightforward and easy to use, I’d recommend this to anyone. I’ve had to apply for probate on an estate with various investments, property and outstanding tax. I entered all information over a couple of days, prompted by they software. I think it would be hard to go wrong. I had questions answered very quickly either by phone or email. There was a slight glitch which resulted in incorrect tax form generation. I sent a query in on a service ticket and got a phone call over a weekend that resolved everything. My IHT400 and Probate were accepted and granted straight away. Providing you have all information about the estate to hand, this makes it very easy. Well worth the money. Thanks.
YCDP really took the stress (as well as quite a lot of admin) out of the Probate application process. Very simple to follow, with clear instructions, and easy-to-follow User Guide. Thorough prompting ensures that you complete everything necessary at each stage before being allowed to print the final Probate application form. I only had to call for support once and my question was dealt with quickly and efficiently.
AFFORDABLE FIXED PRICE
Forms filled in for you
No expertise needed
Unlimited UK support
One time payment
£499
including VAT
Get started in 3 simple steps
Back Guarantee
T&Cs apply.
Monday to Saturday; 9am - 6pm
Trusted & Secure
