If the estate you are reporting to HM Revenue & Customs needs to make use of the Residence Nil Rate Band Exemption, to reduce or remove an inheritance tax liability, then the only way this can be achieved, is through completing the Inheritance Tax Account (IHT400).
In addition, whilst it is possible (in certain situations) to claim a transferable nil rate band from a spouse's estate to reduce or remove an estate's liability to inheritance tax through the simpler Return of Estate Information Form (IHT205) and the accompanying form IHT217, the same functionality has not yet been incorporated into the forms for the the transferable Residence Nil Rate Band.
Reporting an estate through the IHT400 route also means that the time taken to obtain probate is longer, as a receipt needs to be obtained from HMRC in the first instance before it is possible to submit the application for probate. Where the estate can be reported by the IHT205 route then the tax papers are submitted to the probate registry at the same time as lodging the application papers.
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