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  • FIRST POST
    • greensea27
    • By greensea27 31st Aug 17, 6:48 PM
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    greensea27
    Inheritance Tax - possible unused nil rate band from 1965?
    • #1
    • 31st Aug 17, 6:48 PM
    Inheritance Tax - possible unused nil rate band from 1965? 31st Aug 17 at 6:48 PM
    I am the executor of my recently deceased aunt's will, and am preparing the figures I need to apply for probate.

    Her estate is worth more than the current nil rate band of £325k, and I am obviously looking to minimise the amount of Inheritance Tax the estate will need to pay.

    My aunt's (first and only) husband died in Feb 1965, and probate was granted 3 months after his death. The net value of his estate was £3,540 and £39-12-0 (that's £39.60) was paid "on account of estate duty and interest on such duty". My aunt was the sole beneficiary in his will.

    My question is: was there any equivalent of the nil rate band in effect in 1965, and if there was, any thoughts on how I can determine how much this might allow me to transfer to her current probate application to hopefully decrease the Inheritance Tax due?
Page 1
    • greyfox
    • By greyfox 31st Aug 17, 7:35 PM
    • 442 Posts
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    greyfox
    • #2
    • 31st Aug 17, 7:35 PM
    • #2
    • 31st Aug 17, 7:35 PM
    Before 1975 Estate Duty (rather than Inheritance Tax) applied & there wasn't much of a nil-rate band. As your Aunt paid Estate Duty, the nil-rate band was used then. Except in very unusual circumstances, no "transfer" is possible when the first death was before 1975. This article explains things in more detail.
    https://www.taxation.co.uk/articles/2010/01/20/19855/nil-rate-band-problem
    Last edited by greyfox; 31-08-2017 at 7:40 PM.
    • Keep pedalling
    • By Keep pedalling 31st Aug 17, 9:19 PM
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    Keep pedalling
    • #3
    • 31st Aug 17, 9:19 PM
    • #3
    • 31st Aug 17, 9:19 PM
    Is her estate being left to children and if so did she own her home, or did she sell a home to move into care before she died? If so you can also use her primary residence nil rate band (currently £100k) and can double that up using her husband's allowance.

    This assumes her death was not before 6th April this year.
    • eddyinfreehold
    • By eddyinfreehold 4th Sep 17, 12:35 PM
    • 23 Posts
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    eddyinfreehold
    • #4
    • 4th Sep 17, 12:35 PM
    • #4
    • 4th Sep 17, 12:35 PM
    Greensea

    I believe the Estate is entitled to some transferable allowance. I am in a similar position with my late father's Estate following his death in Feb 2016. He was widowed 47 years earlier and never remarried. The Estate Duty threshold from 1963-1969 was £5000. See the link below.

    If the net value of the Estate was £3540 and £39.60 (of what?? expenses or tax??) was paid, I think there may be a mistake in the original 1966 Grant of Probate or a mistake reading the figures on your copy. Currently if all the modern transferrable allowance was not used up in 1966, and it shouldn't have been as the Estate was £1460 short of the £5000 threshold, then 1460/5000 x 100 should be a transferrable allowance as a percentage to add to your aunt's allowance. If the 1966 Probate declares £3540 then 70.8 pc of the allowance has been used already. I make that 29.2 percent of the presumed £325000 allowance of your late uncle to add to the aunt's £325000 allowance. Therefore on these figures alone I would suggest that the Estate should not be due for IHT unless it exceeds £419,900. Above £419,900 IHT is due at the full rate unless land is involved. I would stress I am not an accountant or solicitor and if you are not confident the get proper legal advice. I will tell you it will be a long haul. We received Grant of Probate in December 2016 and have heard nothing from HMRC since. I hope this helps.

    My aunt's (first and only) husband died in Feb 1965, and probate was granted 3 months after his death. The net value of his estate was £3,540 and £39-12-0 (that's £39.60) was paid "on account of estate duty and interest on such duty". My aunt was the sole beneficiary in his will.

    My question is: was there any equivalent of the nil rate band in effect in 1965, and if there was, any thoughts on how I can determine how much this might allow me to transfer to her current probate application to hopefully decrease the Inheritance Tax due?

    https://www.gov.uk/government/publications/rates-and-allowances-inheritance-tax-thresholds-and-interest-rates/inheritance-tax-thresholds-and-interest-rates
    • Yorkshireman99
    • By Yorkshireman99 4th Sep 17, 12:44 PM
    • 2,958 Posts
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    Yorkshireman99
    • #5
    • 4th Sep 17, 12:44 PM
    • #5
    • 4th Sep 17, 12:44 PM
    Both you and the OP need to take paid for professional advice. Neither case is straighforward and the fees are likely to be much less than what you pay if you try and DIY and screw it up.
    • eddyinfreehold
    • By eddyinfreehold 4th Sep 17, 12:54 PM
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    eddyinfreehold
    • #6
    • 4th Sep 17, 12:54 PM
    • #6
    • 4th Sep 17, 12:54 PM
    I fully agree and I have. I worked this out myself and took the whole bundle to my solicitor. My case is further complicated by part of the unused threshold declared in a 1970 probate being a trust that was completely used up well before the death of my father !!
    • Yorkshireman99
    • By Yorkshireman99 4th Sep 17, 1:14 PM
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    Yorkshireman99
    • #7
    • 4th Sep 17, 1:14 PM
    • #7
    • 4th Sep 17, 1:14 PM
    Is your solicitor an IHT specialist? Many High Street solicitors are not.
    • eddyinfreehold
    • By eddyinfreehold 4th Sep 17, 1:25 PM
    • 23 Posts
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    eddyinfreehold
    • #8
    • 4th Sep 17, 1:25 PM
    • #8
    • 4th Sep 17, 1:25 PM
    Yes, she is. She is a senior partner in a large London practice miles and miles from where I live. Not cheap, but the potential worst case scenario would be, as you say, far more costly. She is also very approachable, thorough and punctual. Without good and timely communications I would have pulled my hair out by now. These cases must be pretty rare by now.
    • Yorkshireman99
    • By Yorkshireman99 4th Sep 17, 3:01 PM
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    Yorkshireman99
    • #9
    • 4th Sep 17, 3:01 PM
    • #9
    • 4th Sep 17, 3:01 PM
    Noted. Thanks.
    • Spelunthus
    • By Spelunthus 5th Sep 17, 10:25 AM
    • 52 Posts
    • 56 Thanks
    Spelunthus
    Take legal advice from a competant solicitor. We obtained double IHT relief on an estate where one parent died in 2012, and their spouse had died in 1966 (and had not used their allowance then). But it's complex, and you need good advice, and the correct documents and forms,.
    • eddyinfreehold
    • By eddyinfreehold 6th Sep 17, 7:28 AM
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    eddyinfreehold
    Thank you Spelunthus, Yorkshireman for this. As stated above, I have engaged an IHT specialist solicitor to guide us through the process. Although your case was a few years back now, could you indicate how long HMRC took to decide the case after Probate was granted? We have been sitting on our hands now for 9 months with no news. I am assuming they are still on the case and it hasn't fallen off the desk. The reason for asking is that if additional IHT is required, so will the interest be on any unpaid amount due, as will CGT on the estate owing to the 2016-7 stock market rise. I am willing to go with the solicitor's advice of 'sit and wait' for the moment, but would like to know what the norm is....presumably the time taken by HMRC is longer now than it was in 2012.
    • Yorkshireman99
    • By Yorkshireman99 6th Sep 17, 7:35 AM
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    Yorkshireman99
    Sorry to say there is no norm with HMR&C. They are a law unto themselves with an appalling record for obfustication. About the only way to get them moving is a complaint to your MP and the Parliamentary Ombudsman.
    • eddyinfreehold
    • By eddyinfreehold 6th Sep 17, 9:26 AM
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    eddyinfreehold
    Thanks Yorkshireman. I expected this sort of reply. The trouble is, going to my MP to complain is not a recipe for having the Revenue look favourably on this case is it . More sitting on hands required I'm afraid...
    • Spelunthus
    • By Spelunthus 7th Sep 17, 10:11 AM
    • 52 Posts
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    Spelunthus
    We had the whole thing with HMRC completed within the six months of death that they ask for. Our solicitor dealt with it all. We didn't really see the dialogue at all. We needed the 1966 death cert and a statement that no assets were tranferred at that time (because there were no assets).
    • Yorkshireman99
    • By Yorkshireman99 7th Sep 17, 11:37 AM
    • 2,958 Posts
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    Yorkshireman99
    Thanks Yorkshireman. I expected this sort of reply. The trouble is, going to my MP to complain is not a recipe for having the Revenue look favourably on this case is it . More sitting on hands required I'm afraid...
    Originally posted by eddyinfreehold
    I don't agree! I have had to do it twice with HMR&C and the result has been favourable with the matters sorted and compensaton paid for the delay. I have also taken them to the small claims court on three times with success. They are slow learners!
    Last edited by Yorkshireman99; 08-09-2017 at 4:16 AM.
    • eddyinfreehold
    • By eddyinfreehold 8th Sep 17, 12:02 AM
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    • 10 Thanks
    eddyinfreehold
    I don't agree! I have had to do it twice with HMR&C and the result has been favourable with the matters sorted and compensaton paid for the delay. I have also taken them to the small claiums court three times with success. They are slow learners!

    There Yorkshireman99 we will have to agree to disagree.

    Having already given an agreed five figure sum in IHT to the Revenue which nobody can argue with, the case now hangs on a 1970 Will and Probate, Estate Duty, the fact my father was the sole owner of a house in spite of being married and my mother was one of four parties to a bizarre trust or 'family agreement' from her father's Estate in 1955 which favoured her mother and brother. She predeceased by 14 years it's conclusion to confuse matters, and on it's conclusion the Trust funds had been exhausted. The 'family agreement' Trust documents, subsequent oaths of the Trust failing to provide, the inclusion of the Trust in my mother's Probate etc. means that the Law has to be examined line by line to calculate any percentage unused portion of her transferable IHT threshold in spite of the fact it didn't exist 47 years ago.

    The consequence, depending upon the whim of the Revenue is either we pay them a further nothing or anything, including IHT interest, a significant six figure sum.

    Hence I am willing for them to wait for a kind day to have a look at the case rather than threaten them with litigation. Surely you must agree?
    • Yorkshireman99
    • By Yorkshireman99 8th Sep 17, 4:23 AM
    • 2,958 Posts
    • 2,318 Thanks
    Yorkshireman99
    I don't agree! I have had to do it twice with HMR&C and the result has been favourable with the matters sorted and compensaton paid for the delay. I have also taken them to the small claiums court three times with success. They are slow learners!

    There Yorkshireman99 we will have to agree to disagree.

    Having already given an agreed five figure sum in IHT to the Revenue which nobody can argue with, the case now hangs on a 1970 Will and Probate, Estate Duty, the fact my father was the sole owner of a house in spite of being married and my mother was one of four parties to a bizarre trust or 'family agreement' from her father's Estate in 1955 which favoured her mother and brother. She predeceased by 14 years it's conclusion to confuse matters, and on it's conclusion the Trust funds had been exhausted. The 'family agreement' Trust documents, subsequent oaths of the Trust failing to provide, the inclusion of the Trust in my mother's Probate etc. means that the Law has to be examined line by line to calculate any percentage unused portion of her transferable IHT threshold in spite of the fact it didn't exist 47 years ago.

    The consequence, depending upon the whim of the Revenue is either we pay them a further nothing or anything, including IHT interest, a significant six figure sum.

    Hence I am willing for them to wait for a kind day to have a look at the case rather than threaten them with litigation. Surely you must agree?
    Originally posted by eddyinfreehold
    Of course I accept that, as always, litigation should be the last resort. However, you stated that applying pressure via your MP was a bad idea. I can only say enphaticly that it is not. Any Government department that gets too many complaints via MPs, direct or using the Ombudsman, is not well regarded. You certainly will not get you case treated unfairly as a result but it will get sorted quicker.
    • eddyinfreehold
    • By eddyinfreehold 8th Sep 17, 7:13 AM
    • 23 Posts
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    eddyinfreehold
    I can see your side of the argument Y but it is not the way I will go...... for another year or so at least.
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