Probate, Inland revenue and house sales

[silvercar]

If anyone can offer advice please do so.

In a chain, at the top sits a lady who lost her husband some time last year. She was selling the house last summer but it all fell apart because of some requirement between probate/ revenue etc.

We only joined this chain in December. Everything was then allegedly in place, probate had been sorted. 5 people in this chain. By yesterday everything was lined up for exchange next week, everyone had had surveys etc and we are all feeling confident when her solicitor says that she won't (or can't) exchange without some document from the revenue. This could apparently take between 1 and 3 weeks. We are in the centre of the chain. Everyone is prepared to wait if it really is 1-3 weeks except the FTBs who are getting really irritated. They are talking of pulling out.

Can anyone guess what this doument might be or how long it may take to get?

I am worried that the 1-3 weeks quoted may be just to keep us happy and could get dragged out. On the other hand if it is 1-3 weeks we could promise to complete only 2 weeks after exchange rather than 4 and keep the FTBs moving in on the same date.

[jonesMUFCforever]

Could it be the actual Grant of Probate!
It might be that she had been hit by an almighty Inheritance tax bill upon the death of her husband to be repaid when the sale went through. It might be now that solicitor is sorting the grant through the court to enable the sale to be completed.

[silvercar]

Apparently she has been advised by her solicitor not to exchange without this document. This suggests that there is some advantage in waiting for it. I was wondering if she was in the process of agreeing instalment payments with IR and if she exchanged on her house first there is a risk the IR will not accept instalments, is this possible?

At the end of the day all I need to know is how long it takes the IR to give her this document once its been applied for? I have been told its a formality she needs to do, rather than awaiting any decison from the IR.

Times being banded around are anything from a week to a month. The FTB have been stalled for a week.

[Ian W]

silvercar,

If husband has died anything left to the wife would be exempt from IHT, wouldn't it? Though anything left [above the threshold] to others wouldn't be. Might well be grant of probate but I wouldn't have thought she'd be in a position to sell a jointly owned property til she had that and I wouldn't have thought that would have been from HMR&C. Can't your solicitors make enquires then explain exactly what is being waited for?

Might help keep FTBers onside if everyone knew exactly what the hold-up was.

Could also post on the cutting tax thread as several there have very good knowledge of IHT. Sorry can't be more helpful. BoL.

[AllatSea]

I think it might be the "clearance certificate"

It discharges future tax liability. I think you need one of these, but I'm not 100% sure.

[silvercar]

Thanks for the advice.

Apparently she's been advised to wait as opposed to she has to wait.

I would guess that there probably is some IHT to pay, given the value of her property.

Its all very well being advised to wait but she is weighing up the balance between exchanging with this piece of paper and without. What she should be considering is waiting for the paper and risk losing the sale (if the FTBs pull out), in which case how is she going to pay her IHT?