Mistake in Inheritance Tax

John_Pierpoint

I am a complete amateur at this probate business but even I know that to cover his back the executor has to:
1. Advertise for creditors.
2. Get a certificate off HMRC to say the tax has been paid.

Who were the executors? - it is their job to pay the IHT, not the beneficiaries. Saying they employed an advisor is no get out with the tax man, any more than it would be with an income tax return.

64K is a lot of money and I don't understand from the posting, why it is still outstanding.
Did the executors smuggle a property through probate and then manage to sell it for 160K more than the probate value?
Or did they undertake to pay the tax on property in instalments and then sneak off and flog it, forgetting to mention it to the tax authorities? When my DD died, we could not have got away with this because the then Inland Revenue stuck a legal charge on the family home, to make sure we didn't.
I think there is more to this than meets the eye so far?

cabbage

Hi
I've just been through probate with my late dad's estate.

In the letter that came with the Grant of Probate is says
"If you completed the short form IHT205 or IHT207 HMRC Capital Taxes are entitled to require a full account from you. If within 35 days of the issue of the grant they (HMRC) do not call for this, you have automatic clearance from Inheritance Tax, provided a full disclosure of material facts has been made"

I'm not sure the size of the estate but this may be a get out clause for you. If not, you would have a claim against the solicitors as they have acted improperly by distributing the estate before all bills have paid.

Contact the Law Society for further information.

John_Pierpoint

That is the form you complete is you are "sure" there will be no tax to pay.

If there is any suggestion that the estate is approaching the limit of the nil rate band (ie probably about 300K plus depending on the date of death) then a much more complex procedure has to be followed. This settlement is at least 160K over the nil rate band and should have been reported on the IHT400 series of forms. lots and lots of pages of them.
This is considerably more than a slight oversight on the part of the executors.
Can I hear the sound of interest and penalties approaching?

oldwiring

A late little point. Was the solicitor acting as executor, or was he acting as agent for the executor (s)? I wonder, if the latter, whether the beneficiaries disadvantaged by the unfortunate events, have a direct case vs. the solicitor, but rather one vs. the executor (s) as principal (s)

sdooley

If the tax was always going to be due (we don't have enough information to be sure) then there isn't any loss to you from having to pay the tax back now.

However if there are penalties and interest due to an error by the solicitor, they should definitely be recompensing you for them. Whether they claim on their insurance or pay it out of their own pocket will depend on the deductible. As said above though, this could be down to sharp practice by one of the other 27 beneficiaries in undervaluing something they took out of the estate, in which case they not you should be paying the tax.

Fire_Fox

It's all very well saying there isn't any loss as the extra money was an overpayment, but if you don't have the money and cannot get more you cannot pay it back! I hope the Law Society will be able to help.

lincroft1710

gromit - well it's 10 July, any news?