Beware of Misleading IHT Form: Potential for Overpayment

When it comes to inheritance tax (IHT), even seemingly straightforward forms can lead to costly misunderstandings. In the press this weekend*, a solicitor raised concerns about the IHT436 form, describing it as “really misleading.” Her cautionary tale involves a client who, due to a misunderstanding of the form’s rules, ended up overpaying IHT by a substantial £30,000.

The IHT436 form is crucial for transferring the residence nil rate band (RNRB), often used to pass this tax-exempt allowance from one spouse to another upon the second spouse’s passing. The RNRB encompasses an additional tax exemption, which notably includes properties that were the primary residences of the deceased.

Neal Groves, Client Partner and Head of Personal Tax at Beavis Morgan, says: “IHT is far from straightforward, with various aspects and individuals holding diverse assets. This complexity underscores the importance of seeking professional guidance to effectively navigate the intricacies of tax exemptions and benefits.”

At Beavis Morgan, we are committed to offering tailored advice and guidance to help you make informed decisions about your inheritance tax planning. Our team of experts is dedicated to assisting you in preserving your assets and minimising your tax liabilities.

To safeguard your financial interests and avoid potential overpayments, it is essential to consult with experts who possess the knowledge and experience necessary to navigate this complex terrain. Contact Neal Groves or your usual Beavis Morgan partner to ensure that your estate planning is both comprehensive and tax-efficient.