Iht 205 Form – Fill Out and Use This PDF

Where do I start?

Am I using the right form?

What do you mean by 'gross value'?

What do you mean by 'estate'?

Introduction

You need a grant of representation to get access to most of the assets in the deceased's estate. The most common types of grant are

•a grant of probate, where the deceased left a Will, and

•a grant of letters of administration, where the deceased did not leave a Will.

Before you can get a grant, you need to pay any inheritance tax that is due, or be able to show that no inheritance tax is payable. For most estates there is no tax to pay and you will only need to fill in form IHT205 to give brief details of the estate. If there is tax to pay, or if the affairs of the deceased do not meet certain conditions, you will have to provide a formal account of the estate by filling in form IHT400 and sending it to us. You should start with form IHT205. It will guide you through the various conditions that apply and help you to decide whether or not you need to fill in a formal account.

For many people, this will be only the first or second time that they have had to deal with probate and inheritance tax. In most estates, matters are very straightforward and form IHT205, together with these notes, will help you to get things right. But before we start, here are some answers to the questions that are most often asked of our helpline.

Frequently asked questions

You can use form IHT205 provided that

•the deceased had their permanent home here and there is no tax to pay because either

•the gross value of their estate is less than the excepted estate limit, or

•the gross value of their estate is less than £1,000,000 and all or part of the estate passes to

•the deceased's spouse or civil partner, or

•a charity or other qualifying body.

You may find that as you go through the form that some other conditions mean that you must stop and fill in a formal account instead. But provided these initial conditions are met, you can start with form IHT205.

The gross value is the total of all the assets that make up the deceased's estate before any of their debts are taken off.

For inheritance tax, a person's estate is made up of

•assets in sole name of the deceased,

•their share of any jointly owned assets,

•the assets in a trust in which the deceased had the right to benefit,

•any 'nominated' assets, and

•any assets they have given away, but kept an interest in.

The total of all these assets is added to the chargeable value of any gifts made within seven years of the death to work out the amount on which tax is charged. The notes in the following pages tell you more about these different types of assets and when gifts may be liable to inheritance tax.

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What is the 'excepted estate limit'?

What do you mean by 'permanent home'?

What do you mean by 'charity or other qualifying body'?

Why does it matter whether the estate passes to the spouse or civil partner or to charity?

Assets which pass to the spouse or civil partner

The excepted estate limit is normally the same as the amount above which inheritance tax is payable (the IHT threshold). The one exception to this rule is that it is the IHT threshold for the previous tax year that applies where

•the death occurred after 5 April and before 6 August in any one year, and

•you apply for a grant before 6 August.

For example, the IHT threshold is

•£255,000 for tax year 2003/04, and

•£263,000 for tax year 2004/05.

So, if the deceased died on 21 April 2004 and you apply for grant before 6 August 2004, the excepted estate limit is £255,000. But if you apply for a grant on or after 6 August, you can use the higher limit for 2004/05 of £263,000.

You can find out what the IHT threshold is by looking on the Internet or telephoning our helpline.

Your permanent home is the country where you intend to live for the remainder of your life. It is the country whose laws decide, for example, whether a Will is valid, or how the estate of a person who has not made a Will is dealt with when they die.

Assets passing to a spouse or civil partner or to charity

By charity, we mean any organisation or body that is registered in the United Kingdom as a charity. All such organisations will have a registered charity number. Not all organisations that are treated as charitable for tax purposes have a registered number. Other qualifying bodies include some schools, churches and other national organisations such as the National Trust and National Gallery. You should read Annex 1 to these notes if you need to find out about the organisations that qualify as charities for tax purposes.

Broadly, assets that pass to the deceased's spouse or civil partner or to a charity are exempt from inheritance tax. So, if most of the assets pass to the deceased's spouse, or civil partner, or to a charity, it is likely that there will be no tax to pay. If there is no tax pay because of these exemptions, and the estate meets the other conditions that apply, mainly that the gross value does not exceed £1,000,000, you will not have to fill in a formal account. But there are some restrictions to these exemptions.

Where assets pass to the deceased's spouse or civil partner, both the deceased and their spouse or civil partner must have been

•born in the United Kingdom, and

•had their permanent home in the United Kingdom throughout their lives.

But is does not matter whether the assets pass directly to the spouse or civil partner, or whether they pass to a trust from which the spouse or civil partner is entitled to benefit.

Both the deceased and their spouse or civil partner must meet these conditions. If either of them does not and the gross estate is likely to be more than the excepted estate limit, do not fill in form IHT205 - you will need to fill in form IHT400.

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Assets which pass to a charity

What about assets owned jointly with other people?

So what do I do now?

Where assets pass to an organisation that you think might qualify as a charity, check Annex 1 to these notes to make sure that the organisation does qualify. The legacy must pass directly and unconditionally to the organisation. It must not pass into a trust for the benefit of the organisation concerned.

If an organisation benefiting under the Will does not meet these conditions, you must not deduct charity exemption for the legacy it receives when filling in form IHT205.

Jointly owned assets

Bank and building society accounts, stocks and shares and freehold and leasehold property are the assets most usually owned in joint names. If the deceased owned any assets jointly with another person or people, you will need to include a value for the deceased's share of the assets in the estate.

Where assets are owned jointly by two or more people, the way in which those assets are owned makes a difference for inheritance tax and probate.

If the deceased

•held an asset with someone else, and

•wanted their share to pass automatically to the other joint owner,

we call the asset a ‘joint asset’. You should work out the value of the deceased’s share in a joint asset by dividing the value of the whole asset by the number of joint owners and include that value in box 12.3.

If the deceased

•held an asset with someone else, and

•wanted their share to pass under their Will (or if they did not make a Will, under the rules of intestacy) to the other joint owner or to someone else,

the joint owners hold the asset as ‘tenants-in-common’. The deceased's share is usually in proportion to the money they put up to buy the asset or the amount they put into a joint account.

You should describe each asset held as tenants-in-common, give the value of the whole of it, and for the deceased's share in box 14.

You should then include the value of the deceased's share of an asset owned as tenants-in-common in the relevant box in part 11.

So if the asset was a bank account, you should include it in box 11.1; if it was the deceased's house, include it in box 11.8 and so on. If the asset was not in the United Kingdom, include it in box 12.5.

What you should do first

Make a thorough search of all the deceased's papers about their financial affairs. Make a rough list of their assets, investments, their other financial interests and the debts they owed when they died.

If the deceased had to fill in Self Assessment tax returns, they may have kept records to fill in those forms and these may help. Bank statements and building society passbooks may help you to discover whether any gifts were made. Remember that although the income from certain assets such as PEPs, TESSAs and ISAs is not liable to income tax, both the capital and the income

What do I do when I have got the assets and the values sorted out?

How do I value all the assets?

Valuing assets owned jointly

are liable to inheritance tax and must be included.

You may also find it useful to ask others what they knew of the deceased's affairs. People who might be able to help are

•any solicitor or accountant who dealt with the deceased's affairs,

•the deceased's close family (especially to discover gifts),

•anyone named in the Will who might know about the deceased's affairs,

•any close business associates of the deceased,

•the deceased's bank, stockbrokers or other financial advisors (the bank may have other papers or valuables lodged with them for safekeeping).

You will need to make quite detailed enquiries so that you can find out about everything that makes up the deceased's 'estate'. It is very important that provide full and accurate information because you may make yourself liable to a financial penalty if you provide information incorrectly due to your negligence or fraud.

When you have completed your rough list of assets etc, you will need to find out the value of each of the assets concerned. It is important that you value the assets correctly, because you may make yourself liable to a financial penalty if you are negligent in arriving at the value.

When you have got a good idea about the assets that make up the estate, and their values, add up the figures. If the gross value of all the assets, when added to the chargeable value of any gifts the deceased made, is less than £1,000,000, you may continue to fill in form IHT205.

But, if the gross value

•is more than £1,000,000, or

•is more than the excepted estate limit and no assets pass to the deceased's spouse or civil partner or to a charity

do not fill in any more of form IHT205 - you will need to fill in form IHT400.

Valuing assets

For inheritance tax purposes, you have to value all the assets as if each item had been sold on the open market on the date the person died. This is called the ‘open market value’. It represents the realistic selling price of an asset, not an insurance value or replacement value.

You should be able to value some of the estate assets quite easily, for example money in bank accounts, stocks and shares. In other instances, you may need the help of a professional valuer. If you do decide to employ a valuer, make sure you ask them to give you the 'open market value' of the asset.

When you write the value of assets or debts on the form, do not include pence and round down to the nearest pound. If you leave a box blank we shall assume you mean that the deceased did not own any assets of the type described.

There is more detailed help about valuing different types of assets later on in these notes.

It does not matter whether the assets are owned as joint assets, or as tenants- in-common, the starting point in valuing of the deceased's share is their share of the whole value. So, if three people contributed equally to a bank account with

What do I do if I cannot get an accurate value?

Do I still have to get accurate values when the estate is very small?

Estimating values and small estates

If you do not know the exact amount or value of any item, such as an income tax refund or household bill, do not put off applying for the grant just because you do not know the exact figures. You may use an estimated figure.

You should not guess at a value, but try to work out an estimate based on the information available to you. If you do include an estimate, tick the box alongside the figure concerned.

No, you do not.

If the gross value of the estate is likely to be below £200,000, you can estimate the value of the assets. You should not guess at a value, but try to work out an estimate based on the information available to you. There is no need to tick the boxes to show the figures are estimates in such estates.

Gifts made more than 7 years before the death

In most cases, you can ignore gifts and transfers that were made more than 7 years before the death. But you should not ignore gifts or transfers where

•the deceased kept back some benefit or interest in the assets given away or was entitled to use the assets given away (when you should answer question 3 'Yes'), or

•the deceased had made a gift or transfer within 7 years of death and within 7 years of that gift the deceased had transferred assets to a discretionary trust or to a company.

In the second situation, you do not need to tell us about the gift or transfer made more than 7 years ago. But the person who received the gift or transfer made within 7 years of the death may have a separate liability to inheritance tax. If you are aware that these circumstances apply to the deceased, we recommend that the person who received the gift or transfer should telephone our helpline to discuss their circumstances.

Foreign trusts

Trust assets passing to the deceased's spouse or civil partner or a charity.

Question 5

Foreign assets

Question 6

Insurance premiums

Question 7

Transfer of pension entitlement

Question 8(a)

Pension entitlement paid to the estate

If the deceased had the right to benefit from more than one trust, or the value of the assets in a single trust was more than £100,000, stop filling in form IHT205 now - you will need to fill in form IHT400.

In deciding how to answer question 4, it does not matter whether the trustees are resident in the UK or abroad; you must take into account all the trusts in which the deceased had a right to benefit.

If all the assets in a trust pass to the spouse or civil partner or to a charity (either on death or when the deceased’s right to benefit ceased before death), the £100,000 limit does not apply to the trust assets. You should include the trust assets and debts on the form and deduct the appropriate exemption in box H on page 4.

Inheritance tax is charged on the worldwide assets of someone who has their permanent home in the United Kingdom so it includes any overseas assets that they owned. You should include the sterling value of any overseas assets in box 12.5.

The Isle of Man and the Channel Islands are not part of the United Kingdom.

If the answer to question 5 is 'Yes', and the gross value of the overseas assets is more than £75,000, stop filling in form IHT205 now - you will need to fill in form IHT400.

The £75,000 limit applies to the estate as a whole, so to be sure that the limit of £75,000 is not exceeded, you will need to add together

•any foreign assets that the deceased owned in their own name, plus

•their share of any jointly owned foreign assets, and

•any foreign assets held in a trust.

Where the deceased owned foreign assets, you may also need to take out a separate grant in the country where the assets are, so that you can deal with them.

If the deceased was paying insurance premiums on a policy that will pay out to someone else, you may need to take the premiums paid into account as gifts. You can answer 'No' to this question if the policy was for the benefit of the deceased's spouse or civil partner. If you answer 'Yes' to this question, you must also answer question 9.

If the deceased was entitled to a pension, either from a pension scheme or a personal pension policy and they had not taken their full retirement benefits by the time they died, you may need to take into account any changes they made to their pension benefits. You can ignore the state pension in answering this question.

You can answer this question 'No' where the deceased was drawing their retirement pension in full. If you answer 'Yes' to this question, you must also answer question 10.

If the deceased was receiving a pension from a pension scheme or pension policy, the payments may have been guaranteed for a certain period of time. If the guarantee period ends after the death, the payments will continue to be made to the estate, and the right to receive those payments is an asset of the estate. If this applies in your estate, answer question 8(a) 'Yes' and include the value of the right to receive the payments in box 11.11

11.Deceased's own assets

Box 11.1

Cash, money in banks, building societies and National Savings

Dealings with benefits under pensions can be very complicated. If you answer 'Yes' to question 7, you should read Annex 4 to find out how to answer questions 10(a) and 10(b).

If your answers are 'Yes' for question 7 and 'No' for questions 10(a) and 10(b), you can continue filling in form IHT205.

But if the answer to either question 10(a) or 10(b) is 'Yes', stop filling in form IHT205 now - you will need to fill in form IHT400.

You must include the gross value for both the deceased's own assets and their share of any assets held as tenants-in-common in section 11. Please make it clear if you are including only a share of an asset, such as a house. Gross value here means the value of the assets before deduction of any relief or exemption. If you need to include an estimated value, read the appropriate paragraph earlier in this guide.

Also, and this may seem rather obvious, but you must include all the assets that were part of the deceased's estate as at the date of death.

We say this because if two people, say husband and wife, die in close succession, it is possible for the beneficiaries of the second to die to alter the devolution of the estate of the first to die by executing Deed of Variation within two years of that death. The effect is that they can redirect assets from the first estate away from the second estate.

But a redirection in these circumstances only has effect for inheritance tax purposes. It does not alter the value of the second estate for probate purposes, so it is the value of the second estate as at the date of death that determines whether you can fill in form IHT205, or whether you must fill in form IHT400. If the gross value of the second estate as at the date of death exceeds the excepted estate limit, you must fill in form IHT400.

You should include in this box the total figure for all the money in bank and building society accounts, National Savings investments and cash when the person died. This will include

•cash held by the deceased, kept at home or elsewhere, such as a safety deposit box,

•money in current, deposit, high interest, fixed interest, term, bond and money market accounts,

•accounts with supermarkets or insurance companies,

•National Savings Bank accounts,

•Premium Bonds,

•TESSAs,

•cash in an ISA,

•travellers’ cheques.

The figure should include interest that was owed up to that date but was not actually paid into the account. You can get these figures from the bank or other organisation holding the account.

National Savings investments include

•National Savings Certificates

•National Savings Capital or Deposit Bonds

•National Savings Income Bonds

•Pensioners Guaranteed Income Bonds

•Children’s Bonus Bonds

Box 11.2

Household and personal goods

Box 11.3

Stocks and shares quoted on the Stock Exchange

Box 11.4

Stocks and shares not quoted on the Stock Exchange

•First Option Bonds

•Save As You Earn Contracts

•Year Plans.

You can find out the value of all National Savings investments by sending off form NSI 904. You can get this form from the Post Office. Or you can telephone the National Savings Enquiry Line 0845 964 5000 or e-mail to customerenquiries@nsandi.com

The term ‘household and personal goods’ means things such as furniture, pictures, paintings, china, TV, audio and video equipment, cameras, jewellery, cars, caravans, boats, antiques, stamp collections and so on. You do not have to get a professional valuation, although it might worth doing so if you think any items may be worth more than £500. If you estimate the value, remember to use the open market value not an insurance or replacement value.

The open market value is the realistic selling price for the items. This is likely to be the value the item might fetch if sold at auction, or through the local paper, or even at a car boot sale.

You should include in this box

•UK government securities such as Treasury stock, Exchequer stock, Convertible stock and Consolidated stock,

•all stocks, shares, debentures and other securities listed on the Stock Exchange Official List,

•Unit trusts,

•Investment trusts,

•Open-Ended Investment Companies,

•PEPs

•shares in an ISA.

You should also include any dividends that were due, but had not been paid before the death.

Annex 5 tells you how to value quoted stocks and shares.

The registrars for British Government stock are Computershare Investor Services PLC, PO Box 2411, The Pavilions, Bridgwater Road, Bristol, BS3 9WX. The helpline number is 0870 703 0143 and e-mail address is gilts@computershare.co.uk. Please note that Computershare are unable to provide valuations. You can find out the value of British Government Stock by contacting your local bank or stockbroker or at www.dmo.gov.uk

You should include in this box

•shares in a private family company which are not quoted on the Stock Exchange

•shares listed on the Alternative Investment Market (AIM)

•shares traded on OFEX (an unregulated trading facility for dealing in unquoted shares).

You will be able to value shares on AIM or OFEX in the same way as quoted stocks and shares (see annex 5).

For private company shares, you should give an estimate of the open market value of the shares. You may need to contact the company’s secretary or accountant to get this value. You should not include just the nominal value of such shares - for example the nominal value for 1,000 £1 ordinary shares is

Box 11.5

Insurance policies, including bonuses and mortgage protection policies.

£1,000 - unless that genuinely reflects your estimate of the open market value of the shares.

You should include in this box the total value for

•life insurance policies paying out to the estate, including any bonuses that are paid,

•money paid under a mortgage protection policy (if the policy was in joint names, include the amount payable in box 12.3),

•insurance policies held in ISAs,

•payments received under investment schemes which pay 101% of the unit value on death,

•payments received under investment or re-investment plans, bonds or contracts with a financial services provider which pay out on death,

• insurance policies on the life of another person but under which the deceased was to benefit.

13. Debts of the estate

Box 13.1

Funeral expenses

Box 13.2

Mortgage on property included in section 11

Box 13.3

Other debts owed in the United Kingdom

Box 13.4

Debts payable out of trust assets

Box 13.5

Share of mortgage on jointly owned property.

Box 13.6

Share of other debts payable out of joint assets.

Box 13.7

Debts owing to persons outside the United Kingdom

You may include a deduction for funeral expenses and a reasonable deduction for the mourning expenses of the close family. You may also deduct the cost of a tombstone or headstone marking the site of the deceased's grave. Write the total value of these costs in this box.

You should include in this box any money that was secured by a mortgage on property that you have included in section 11; if the deceased only owned a share of the property concerned, you should only include the appropriate share of the mortgage. If the deceased had a mortgage protection policy, you should include the mortgage in this box and the money that the policy paid out in box 11.5.

You should only include in this box debts which the deceased actually owed when they died. For example, household bills, uncleared cheques for goods and services provided before the death and credit card debts. Do not include fees for professional services carried out after the death, such as solicitors’ or estate agents’ fees and valuation fees.

If the person who has died had written a cheque to make a gift before they died and the cheque had not cleared by the death, you must not treat the cheque as a deduction. You must include the value for the deceased's bank account without deducting the cheque. You should not show the intended gift as a gift in answer to question 2.

Add up boxes 13.1 - 13.3 and write the answer in box D.

You should include in this box any debts that are payable out of trust assets. If the trustees only give you one figure for the trust assets that is after deduction of any debts, include that figure in box 12.2 and leave this box blank.

You should include in this box the deceased's share of any money that was secured by a mortgage on jointly owned property. If there was a joint mortgage protection policy, you should include the share of the mortgage in this box and the share of the money that the policy paid out in box 12.3.

You should include in this box the deceased's share of any other debts actually owed when they died that are payable out of jointly owned assets.

You should include in this box any debts which the deceased actually owed when they died and which were owed to someone who lived abroad.

Add up boxes 13.4 - 13.7 and write the answer in box E.

Add up boxes D and E and write the answer in box F.

Take away the value in box F from the value in box C and write the answer in box G.

Net qualifying value

And finally…..

Signing the form

Summary

Do I need a copy of the form?

What about all the papers and records I have used to fill in the form?

When will I hear from you if you want to see the papers and records?

What do I do now?

England & Wales

What happens then?

Provided the value in box J does not exceed the excepted estate limit, you may apply for a grant of representation without filling in form IHT400.

If the value in box J exceeds the excepted estate limit, stop filling in form IHT205 now - you will need to fill in form IHT400.

Turn back to the first page of the form. If the value in box C is less than the excepted estate limit, you should tick the first box in the top right hand corner of the first page. If the value in box C is more than the excepted estate limit, but less than £1,000,000 and you have deducted spouse or civil partner, or charity exemption so that the value in box J is below the excepted estate limit, you should tick the second box.

Each person who will be applying for a grant should read the statements above the signatory boxes. In signing the form each person is saying that they have read the statements and will comply with their terms. Each person applying for a grant should write their name and address in one of the boxes, sign and date the form.

Copy the figures from boxes A and D into the respective boxes in the summary. Take box D away from box A and put the answer in box K.

What to do when you have finished the form

The following paragraphs provide answers to the questions that are most often asked of our helpline.

Yes, we recommend that you keep a copy of the signed form for your own records and because you will need it should the value of the estate change after the grant such that tax becomes payable.

You do not need to send us copies of any of the other papers you have used to fill in form IHT205 - just the form itself and any continuation page(s) for box 14. But you should keep the papers and records safe in case we ask for you them.

Provided you have used form IHT205 correctly, it is unlikely you will hear from us. We have 35 days after the issue of the grant to write to you about the information you have given in the form. If we do not write to you in that time, we will not need to see the papers and records and you will not have to pay any inheritance tax.

However, this does not apply if there is anything about the estate you have not told us on this form.

The shaded paragraphs are for people who are applying for a grant without the help of a solicitor or other agent.

There are slightly different processes to follow depending on whether you are applying for a grant in England & Wales or Northern Ireland.

Read the booklet PA2 and follow the instructions to fill in form PA1. When you have gathered together all the papers needed to apply for probate, send form IHT205 and those papers to the relevant probate registry as explained in booklet PA2.

Booklet PA2 tells you what will happen in detail, but briefly, the probate registry will ask you to come for an interview. Provided everything is satisfactory, the probate registry will send you the grant and will send form IHT205 to us.

Northern Ireland

What happens after I get the grant?

What do I do if the value of the estate changes?

How do I tell you about changes?

What do I do if the exemptions change?

Read the booklet “Dealing with a deceased’s person’s estate”. When you have gathered together all the papers needed to apply for probate, telephone the Belfast or Londonderry office to make an appointment for an interview. You will need to take all the papers to apply for probate and the IHT205 with you. After your interview, the probate office will send you the grant and will send form IHT205 to us.

You can begin to deal with the estate by collecting in the assets and paying the debts and legacies.

What to do if the value of the estate changes

If, after you have got the grant, you find some more assets, or you discover that the value of an asset has changed - for example, the house or some personal goods have been sold for a different figure, you should amend your working copy of the form. If, having made these changes, the value at box J is more than the IHT threshold, you will need to tell us about the changes and pay the tax.

You should fill in a Corrective Account, form C4 to tell us about any changes. You can get this form from the Internet or from our helpline. Copy the figure from box J on form IHT205 to page 4 of the Corrective Account and fill in the rest of that page.

You must send form C4 to us within 6 months of finding out about the change to the estate. If you are late in sending the form to us, you may make yourself liable to financial penalties.

You can work out the tax that is payable by deducting the IHT threshold from revised value of the estate and taking 40% of that amount. You might need to add some interest to the tax that is due. Interest runs from 6 months after the end of the month in which the death occurred. Our helpline can tell you what rate of interest is.

If you calculate that there is tax to pay, send the form C4, a copy of the IHT205 and your cheque for the tax and any interest that is due to the Nottingham office.

If you do not want to work out the tax yourself, just send form C4 and a copy of the IHT205 to us. We will then send you a calculation of the tax and any interest that you owe. But we will be able to deal with your estate much more quickly if you can send the payment to us.

If you calculate that there is still no tax to pay, but the changes mean that the estate no longer qualifies as an excepted estate, send the form C4 and a copy of the IHT205, to either the Nottingham or Belfast office, depending whether you applied for a grant in England & Wales or Northern Ireland.

The exemptions will change if those who inherit the estate change after the date of death. The beneficiaries of an estate can alter those who inherit an estate by executing a deed of variation. If the people who inherit the estate change and as result the estate no longer qualifies as an excepted estate, you must tell us about the changes on a Corrective Account, form C4.

For example, if all the assets were left to the surviving spouse, box J on form IHT205 should show '0'. But if the spouse redirects £100,000 to her children, you should reduce the exemption shown in box H by that amount and rework the answer in box J. But as box J still does not exceed the excepted estate limit there is no need to tell us about the change.

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But what if the changes are covered by other exemptions or reliefs?

But if, in the same example, the spouse redirected £300,000 to the children, the new figure in box J would exceed the excepted estate limit. So you would then need to fill in form C4. You should copy the original figure from box J on form IHT205 to page 4 of form C4 and then show the reduction in the exemption on that same page.

This can happen when, for example, all the assets are left to the spouse, but they include a farm that the spouse redirects (by an instrument of variation) to the children. You should reduce the value of the spouse or civil partner exemption by the value of farm and rework the answer in box J. If box J still does not exceed the excepted estate limit there is no need to tell us about the change, but if it is more than the excepted limit, you must fill in form C4.

You should copy the original figure from box J on form IHT205 to page 4 of form C4 and show the reduction in the spouse or civil partner exemption on that page. If you consider the farm qualifies for agricultural relief, you should also include the relief on page 4.

This may mean that there is still no tax to pay. But as the estate no longer qualifies as an excepted estate (because you can only take spouse or civil partner and charity exemption into account in deciding if an estate qualifies as an excepted estate), you must still tell us about the change in these circumstances. You should send a copy of the deceased’s Will and the instrument of variation with the forms.

Confidentiality

You have a right to the same high degree of confidentiality that all taxpayers have. We have a legal duty to keep your affairs completely confidential and cannot give information to others about an estate, trust or transfer even if they have an interest in it, unless the law permits us to do so. This means we may only discuss a taxpayer’s affairs with that person, or with someone else that the taxpayer has appointed to act for them. In the case of someone who has died, this means that we can only discuss an estate with the people (or person) who have signed and delivered form IHT205; that is the executors or administrators, or another person appointed to act for them; usually a solicitor or an accountant.

Data Protection Act

HMRC is a Data Controller under the Data Protection Act. We hold information for the purposes of taxes, social security contributions, tax credits and certain other statutory functions as assigned by Parliament. The information we hold may be used for any of HMRC’s functions.

We may get information about you from others, or we may give information to them. If we do, it will only be as the law permits, to

•check the accuracy of information

•prevent or detect crime

•protect public funds

We may check information we receive about you with what is already in our records. This can include information provided by you as well as others such as other government departments and agencies and overseas tax authorities. We will not give information about you to anyone outside HMRC unless the law permits us to do so.