# IHT416: loans the deceased made that were still unpaid - **Canonical URL:** https://formspedia.com/uk/iht416/ - **Country & Language:** United Kingdom (`en-GB`) - **Form:** IHT416 - **Issuing Agency:** HM Revenue and Customs - **Tax Area:** Estates, trusts and inheritance - **Who Must File:** Personal representatives filing Form IHT400 where the deceased was owed money under a loan at death - **Filing Method:** Attached to paper Form IHT400 and sent to HM Revenue & Customs - **Official Form PDF:** https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/373598/IHT416.pdf If the person who died had lent money and not been paid back, that loan is part of their estate for Inheritance Tax. On a full IHT400 account, schedule IHT416 is where each loan is described, and its total feeds box 73 of the IHT400. The schedule in use is two pages, marked FKPA09/14. HMRC's page has carried it since 4 April 2014. ### One schedule per debt The form asks for a separate IHT416 for every debt. HMRC's own manual repeats the point at IHTM10106: one schedule for each outstanding sum. A parent who lent money to three children fills in three. The kinds of debt HMRC expects to see on it, from IHTM19040: - money the deceased lent personally to someone and had not been repaid - loans secured by a mortgage - money lent to the trustees of a life insurance policy held in trust - debts backed by a promissory note or an IOU - a director's loan account or current account with a company Director's loan accounts are handled differently. For a director's loan account or a current account with a company or business, the form says to answer box 3 and box 9 only. ### The starting assumption: it will be repaid in full The schedule tells you to assume the debt will be repaid in full and to include all the capital and interest outstanding at the date of death. A lower figure is allowed only where repayment is impossible or not reasonably possible. Then you put the reduced figure on the IHT400 and explain it in box 9, with whatever evidence you have and how you worked out the number. HMRC's guidance to its own staff (IHTM19080) says a discounted figure, for example where it is argued the money cannot be repaid or is not repayable on demand, needs that box 9 explanation, and that cases can be passed to HMRC's Actuarial Officer. ### Box by box Page 1 starts with the history of the loan: when it was made (box 1) and how much was lent (box 2). Box 3 is the amount outstanding at the date of death, split into capital and interest. Its total is copied to IHT400 box 73. Box 4 asks whether the loan was secured by mortgage, and box 5 names each borrower and their relationship to the deceased. Page 2 has four free-text boxes: the interest charged, with the rate or rates and the period (6), capital repayments made (7), the evidence that the loan exists (8), and an explanation if you are using a figure different from box 3 (9). The top of page one also takes the deceased's name, the date of death and the IHT reference number if you have one. #### Box 8 needs paper HMRC wants copies of written evidence, such as a letter or a mortgage deed. Several insurance-linked products involve a loan from the deceased to the trustees of a settlement or policy. If the trustees are to repay it, send a copy of the loan agreement and the settlement or policy document as well. ### Points HMRC looks at afterwards IHTM19080 lists what caseworkers check once the schedule arrives. From that list: - Whether interest due under the loan terms was actually received by the deceased. - Repayments or releases during the deceased's lifetime. If part of a loan was written off, the amount written off is a gift, and HMRC checks it appears on form IHT403. - Releases by deed. Unless the release was treated as a gift, HMRC may ask for evidence that the deed was effective. In Scotland a formal deed is not needed to release part of a loan; informal writing or a verbal release can do it. - Loans to trustees of a settlement or insurance policy that the trustees are to repay to the estate, made on or after 18 March 1986. These are referred to HMRC's technical specialists. ### Where the schedule goes IHT416 is not sent alone. It goes in with the IHT400 account and the other schedules. If a debt needs a longer explanation than box 9 allows, the form points you to the additional information boxes on pages 15 and 16 of the IHT400. The helpline printed on the schedule is 0300 123 1072, or +44 300 123 1072 from outside the UK. HMRC's page also says you can email to ask for the form in Welsh. ### Sources - HM Revenue and Customs, Schedule IHT416 Debts due to the estate, FKPA09/14 ([assets.publishing.service.gov.uk](https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/373598/IHT416.pdf)) - GOV.UK, Inheritance Tax: debts due to the estate (IHT416) ([gov.uk](https://www.gov.uk/government/publications/inheritance-tax-debts-due-to-the-estate-iht416)) - HMRC Inheritance Tax Manual, IHTM10106, IHTM19040 and IHTM19080 ([gov.uk](https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm19080))