What is an election on form IHT500?

There has been a “reservation of benefit” if the deceased once made an election on form IHT500 that an income tax charge should not apply to:

1. assets they used to own in which they retained a benefit, or
2. assets bought by someone else, to which the deceased contributed, and in which the deceased retained a benefit.

In this case, the Return of estate information form (IHT205) may not be used, and the IHT400 must be completed instead.

This will affect only a small minority of estates, most likely those where an accountant dealt with the deceased’s income tax. If in doubt, seek advice from the deceased’s accountant.