IHT400 Notes : Guide to completing your Inheritance Tax account

IHT400 Notes
What values to include
Documents you
must keep
Getting started
– how to fill in your
Inheritance Tax account
Instruments of variation
Guide to completing your Inheritance Tax account
The law says that for Inheritance Tax, you have to value all assets as if each
item had been sold on the date the deceased died. We call this the ‘open
market value’. There is more information about valuing assets later in this
guide. Round the value of assets down to the nearest pound and liabilities
up to the nearest pound.
Estimated values
You should make full enquiries to find out the exact value for each item in
the estate. However, if you are having difficulty with one or two items, such
as an Income Tax repayment or household bill, or perhaps details of
foreign tax or income due from a trust, the law says that you may include
a provisional estimate. You should make the best estimate that you can.
You will need to list the boxes that contain provisional estimates in box 119
of form IHT400.
It is your responsibility to tell us the correct figure as soon as you know it.
You do not need to send us copies of documents, for example, a letter from
a bank with the balance in an account or evidence of household bills,
unless we specifically ask you to provide a copy in this guide. However, you
must keep safe all documents that you have used to fill in form IHT400 and
the schedules because we may ask you for some or all of them after you
have obtained the grant.
Original documents
If you have to return an original document, such as a life assurance or
trust or a loan agreement, you should keep a copy in case we ask you for it.
The flowchart on pages 2 and 3 of the Quick start guide included with
these forms, takes you through the step-by-step process of how to
deal with your Inheritance Tax account. You can get a copy of the
Quick start guide from our helpline.
An instrument of variation is a legal document which allows the
beneficiaries of an estate to change the terms of the Will or intestacy after
the death. The IHT400 should be filled in to show any effect the variation
has on the Inheritance Tax due. For example, if the deceased's children
inherit part of the estate and redirect assets to the surviving spouse,
increasing Spouse or Civil Partner Exemption, the IHT400 should show the
increased exemption at boxes 92 and 93. If the variation affects a matter of
general law, such as severing a joint tenancy, the IHT400 should show the
legal position at the date of death, before the effect of the instrument
of variation.
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