Dealing with a claim: reviewing form IHT402 and form IHT216
Both forms are designed to obtain information so that the taxpayer can
- quantify the chargeable value of the estate on the first death,
- deduct that value from the nil rate band that applied to the first death, and so
- quantify the amount of the nil rate band that was unused.
The values used must reflect the chargeable value of the estate, for Inheritance Tax purposes, at the date of the first death, not what the legatees actually received, so no allowance should be made for costs.
Where property that was owned jointly with the surviving spouse or civil partner passed to chargeable beneficiaries, no joint property deduction should be made in view of the related property provision in IHTA84/S161 (IHTM09739).
Similarly, where a property wholly owned by the deceased is left between their spouse and child, you should allow spouse exemption for the full value of a half share.
If the property was jointly owned between the deceased, their surviving spouse or civil partner and other(s), then the normal joint property deduction will apply as between deceased and their spouse or civil partner and the other joint owner(s).