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Where Taxpayers and Advisers Meet

Altering claim for transferable nil rate band

Joined:Thu Aug 06, 2020 6:16 pm
Altering claim for transferable nil rate band

Postby angel500 » Thu Aug 06, 2020 6:29 pm

Hoping you can advise. I'm the executor of my father's will and i wish to do a variation on my mum's will that will make distribution to the beneficiaries much easier. I thought it would be straightforward as there should be no change to IHT on either estate. However, i've just re-read the IHT 402 form for transferable nil rate and see this isn't automatic. The variation would result in more money going to my father's estate instead of to their children. The IHT change will be nil if the transferable nil rate from my mother's estate increases accordingly. Long story why this is late in day. I have Grant of Probate for both. I understand that I can do the variation and claim is also within 2 year time limit. Does anyone know how easy it is to get HMRC to change a previous claim (increasing transferable nil rate allowance) and is it an automatic right in that the variation means my mum didn't use it so it becomes available? I see they specifically say it can't be done on their correction form.

Lee Young
Joined:Wed Aug 06, 2008 3:26 pm

Re: Altering claim for transferable nil rate band

Postby Lee Young » Sun Aug 09, 2020 11:46 am

Technically it is not the executors who can do a deed of variation, but rather the beneficiaries of the estate whose entitlement is being affected by the proposed change. Assuming the deed can be done, and it is within two years of death, then once done a corrective IHT account would need to be sent to HMRC.
Lee Young
Solicitor, Chartered Tax Adviser and Trust and Estate Practitioner

Partner, Frettens LLP
01202 491701

Joined:Wed Aug 06, 2008 3:25 pm

Re: Altering claim for transferable nil rate band

Postby maths » Sun Aug 09, 2020 3:31 pm

Not sure I follow the post.

Mother died followed by father''s death.

Within two years of mother's death a DoV is executed under which it seems more assets are transferred to father from mother in which case the amount of nil rate band used by mother is reduced increasing the amount which can be transferred to father's estate. A claim on IHT302 must be lodged within two years of mother's death for transfer and the DoV must be attached to the claim.

Any resultant change in IHT payable on mother's estate would be notified to HMRC by way of a corrective account.

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