What is an IHT400 and when is it required?

If you are dealing with an estate, one of the first practical questions is whether an inheritance tax return needs to be submitted to HMRC, and, if so, which form is required.

In many cases, this will involve the IHT400 inheritance tax return.

Whilst often referred to as “just a form”, the IHT400 is in reality a detailed account of the estate’s tax position. Understanding when it is required, and what it actually involves, is an important early step in progressing matters efficiently.

What is an IHT400?

The IHT400 is the main inheritance tax return used in the UK.

It is required where an estate does not qualify as an “excepted estate” and therefore needs to be reported in full to HMRC. This involves setting out:

• all assets and liabilities at the date of death 
• details of lifetime gifts 
• any relevant trust interests 
• the resulting inheritance tax calculation 

The return is supported by a number of schedules, each dealing with different categories of assets (for example property, bank accounts, or gifts).

In practice, the IHT400 is not simply about listing values, it involves applying the inheritance tax rules to the facts of the estate.

When is an IHT400 required?

An IHT400 is typically required where the estate is more than straightforward.

This will usually include situations where:

• the estate exceeds the available inheritance tax thresholds 
• inheritance tax may be payable 
• lifetime gifts need to be taken into account 
• trusts are involved 
• or the estate otherwise falls outside the “excepted estate” rules 

Even where no tax is ultimately due, full reporting may still be required.

One of the more common issues we see in practice is estates initially assumed to be “simple”, but which fall outside the excepted estate criteria once looked at more closely.

IHT400 vs excepted estates

Not every estate requires a full IHT400.

Simpler estates may qualify as “excepted estates”, meaning that a shorter reporting process applies. However, the criteria are specific and need to be considered carefully.

Factors such as:

• lifetime gifts 
• trust arrangements 
• or the composition of assets 

can bring an estate outside these rules.

From a practical perspective, it is worth confirming the correct position early, proceeding on the wrong basis can lead to delays and duplication of work.

Who is responsible for filing the IHT400?

The responsibility for preparing and submitting the IHT400 sits with the executors or personal representatives.

They are responsible for ensuring that:

• all relevant information is included 
• valuations are appropriate 
• the inheritance tax position is correctly calculated 

This is not always straightforward, particularly where information needs to be gathered from multiple sources or where records are incomplete.

How the IHT400 process works in practice

Whilst the IHT400 itself is a structured form, the process around it is often less straightforward.

In practice, preparing an inheritance tax return typically involves:

• identifying and gathering information on all assets and liabilities
• obtaining appropriate valuations (particularly for property)
• reviewing any lifetime gifts or transfers
• considering whether any trusts are relevant
• preparing the IHT400 and supporting schedules
• calculating any inheritance tax due
• submitting the return to HMRC and dealing with any follow-up queries

The timing of this process is often driven by how quickly information can be obtained, rather than the preparation of the form itself.

Practical challenges

In practice, the complexity of an IHT400 rarely comes from the form itself.

More often, it arises from:

• identifying all relevant assets 
• establishing accurate values 
• understanding lifetime gifting 
• and dealing with trust arrangements 

It is also common for information to be received in stages, which can slow progress and create inefficiencies.

A structured approach, identifying what is required early and working through it methodically, makes a significant difference.

Common mistakes

Some of the more common issues we see include:

• lifetime gifts being missed or only partially identified 
• reliance on informal or unsupported valuations 
• misunderstanding how trusts interact with the estate 
• inconsistencies across different parts of the return 

These issues do not always arise from complexity, often they come from incomplete information or assumptions being made too early.

Conclusion

The IHT400 is a key part of the inheritance tax process, but it is not simply a compliance exercise.

It requires judgement, organisation and a clear understanding of how the rules apply to the estate in question. Getting this right at the outset can prevent delays and reduce the risk of HMRC enquiries later.

Final Thoughts

If you have any queries about this article on inheritance tax, or need help preparing or reviewing an IHT400, please get in touch.

Alternatively, if you are a solicitor or adviser looking for support on estate matters, we would be happy to assist.