When someone dies, their executors often need to complete HMRC’s IHT400 form — the main inheritance tax return. It’s required when the estate is over the available allowances or involves more complex assets, such as trusts, lifetime gifts, or pensions. Even when no tax is due, the IHT400 can still be needed to fully report the estate.
Put simply, IHT400 planning means getting ahead of that process — pulling together valuations, understanding what reliefs apply, and making sure there’s a plan to pay any tax due.
What does it involve?
Good IHT400 planning isn’t just about filling in a form. It’s about giving executors a clear path to follow. It usually includes:
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Identifying and valuing assets – from property and investments to personal possessions. Professional valuations may be needed for property, business assets, or shares.
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Understanding pensions and death benefits – from 6 April 2027, most unused pensions will form part of the taxable estate. Executors will need valuations from pension providers, and they only have a short window to get them.
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Reviewing lifetime gifts – any gifts made in the seven years before death must be accounted for, along with taper relief where relevant.
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Calculating the liability – applying exemptions, the nil-rate band, the residence nil-rate band, and any business or agricultural relief.
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Planning for payment – inheritance tax is usually due within six months of death, so it’s important to think about how it will be paid. This can be more complex where pensions or illiquid assets (like property or family businesses) are involved.
Why is this especially important now?
The recent reforms mean that, from April 2027, personal representatives — not pension providers — are responsible for reporting unused pensions for IHT. That means more admin, tighter deadlines, and potentially bigger tax bills.
If there’s no cash readily available in the estate, there’s also a risk of having to sell assets quickly or use the new HMRC payment scheme to settle the bill.
How can you prepare?
For individuals, it’s worth:
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Keeping an up-to-date record of all pensions and assets.
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Reviewing beneficiary nominations.
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Considering whether to draw down or gift assets during your lifetime.
For executors, the key is to:
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Notify pension providers quickly.
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Gather valuations early.
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Seek professional support if there are complex assets or reliefs to claim.
The takeaway
IHT400 planning is about more than compliance. It’s about avoiding unnecessary stress for executors, meeting HMRC’s deadlines, and making sure the right tax is paid — no more, no less.
Disclaimer:
This content is based on our understanding of the proposed rules at the time of writing. It is provided for general information only and does not constitute legal, tax, or financial advice. You should seek independent professional advice before taking any action. We accept no liability for any decisions made based on this information.
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