Two new inheritance tax forms have been released by the HMRC in order to enable the residence nil rate band (RNRB).
In addition to the main inheritance tax account form IHT400, the IHT435 and the IHT436 have also been introduced in order to coincide with the introduction of the RNRB.
In order for an estate to qualify for the RNRB, the following must apply:
- An individual dies on or after 6 April 2017
- They own a property or a share of a property, so it is included in their estate
- The property or the share are bequeathed to direct descendants
- The value is not in excess of £2 million
The RNRB will also be available where an individual downsizes to home with a lower value or one which was sold or gifted after 8 July 2015.
The additional allowance will grow by £25,000 each year, finally reaching £175,000 in 2020 to 2021.
New versions of the IHT400 form, IHT400 notes and IHT400 calculation have been released to account for the supplementary Inheritance Tax threshold.
Whilst these forms are used to claim inheritance tax, the IHT435 is a new form which can be used to claim the additional RNRB if eligible.
The RNRB can also be transferred between spouses or civil partners. In order to make a claim for the transferable RNRB against the inheritance tax, the IHT436 form can be used.
