Private client

B P Collins Solicitors: talk to the experts

Gerrards Cross: +44(0) 1753 889995
Beaconsfield: +44(0) 1494 675363

The importance of keeping detailed records: Inheritance Tax

21 November 2007

You need to keep detailed records to claim the Chancellor's largesse as regards the nil rate band transfer between spouses/civil partners

One of the consequences of the Chancellor's changes to the inheritance tax rules that make available the unused nil rate band to the surviving spouse/civil partner, is the need to keep detailed records.

In future, when the death of the surviving spouse or civil partner occurs, it will be necessary to look back at the estate of the first to die. Records will need to be kept of all gifts or transfers made within seven years of that death as well as gifts in the Will to assess how much use was made of the nil rate band on that death.

For example, the Will of the first to die may have left chattels such as a car or jewellery to a beneficiary thus utilising part of the nil rate band. If the first to die had an interest (known as a life interest) under a trust, its value will have to be recorded. Any assets held jointly with third parties will also need to have been valued.

In cases where the first spouse died many years ago, it may be difficult to find any records of the proportion of the nil rate band unutilised at that time.

In order to make a claim on the second death, the Revenue will want to see a marriage certificate, a death certificate of the first partner and a copy of the Will and Probate. If there was a deed of variation, that will need to be produced as well.

Therefore it will make your claim for any unused nil rate band easier if you have the evidence to hand in readiness.