Many executors assume that because no inheritance tax is payable, they can simply apply for probate and get on with administering the estate.

Unfortunately, that isn't always the case.

One of the biggest mistakes people make is confusing whether inheritance tax is actually payable with whether they still need to complete inheritance tax forms like the IHT400.

There are circumstances where you will still need to complete an IHT400 form showing detailed figures for the estate value for IHT and probate values. 

This is where many executors come unstuck and struggle.

If you submit the wrong probate figures, complete the wrong inheritance tax paperwork, or the IHT figures are wrong,  it can lead to:

• HRMC refusing to sign off the IHT paperwork 
• potential HMRC penalties 
• delays in obtaining probate
• forms being rejected
• having to start the process again
• uncertainty over whether tax is due

Fortunately, HMRC provides a free online Inheritance Tax Calculator that helps determine which route applies to an estate.

Many people answer the questions in the Inheritance Tax Calculator incorrectly because they don't fully understand what each question is asking.

A single incorrect answer can completely change the outcome and change whether you pay IHT or not, and can often induce panic, particularly when the initial results give huge IHT figures.

Although every estate is different, most fall into one of these categories.

Scenario 1 – A Simple (Excepted) Estate

The estate is below the available inheritance tax thresholds.

No inheritance tax is payable, and the estate may qualify for the simpler probate process.

Scenario 2 – The First Spouse Has Died

This is where many people become confused.

The first spouse may have left assets in their sole name, gifts may have been made during their lifetime, or transferable allowances may need to be considered later.

Understanding how this affects the estate can make a significant difference.

Scenario 3 – The Second Spouse Has Died

This is often the most complicated situation.

The estate may benefit from:

• transferable Nil Rate Band
• Residence Nil Rate Band
• transferred Residence Nil Rate Band
• spouse exemptions
• gifts made during lifetime

Getting these calculations wrong can potentially cost families thousands of pounds in unnecessary inheritance tax.

Don't Guess

The government's checker is an excellent starting point—but only if you know how to answer each question correctly.

That's exactly why I created the Inheritance Tax Calculator Training product.

This video based training covers the 3 most common scenarios for probate and IHT that we see for most average families.

The videos explain how to answer the questions correctly, rather than how you might interpret them, covering those 3 scenarios to help you better understand how to use the tool.

The training covers:

• How the checker works.
• How to answer each question correctly
• Understanding whether IHT is due and if so how to calculate how much (not just use the results from the checker tool output)
• What info you need to prepare before using the tool.
• How to claim unused Nil Rate and Residential Nil Rate tax allowances which can further reduce IHT by up to £1m.

👉 Get your access to our Inheritance Tax Calculator Training here 

Are you looking for help to understand which scenario applies to your situation? Give the Let's Do Probate team a call on 0330 229 0319 , and we’ll be happy to help. You can schedule a free timed call to suit you, using our online booking system here