IHT / facing bankruptcy?

noh

She needs to get proper advice preferably from a STEP member.
But one thing that needs to be pointed out is that it is the estate that owes the IHT not your friend.
Ideally she needs to come to some sort of agreement with the girlfriend so that a deed of variation can be written allowing the house to be sold and perhaps a lower value house purchased and the girlfriend given the right to live in that.

dzug1

I would have thought she could refuse the bequest and walk away from the situation.

OK she might get nothing - but doesn't owe anything either. And no risk of bankruptcy.

JasX

dzug1 wrote: »

I would have thought she could refuse the bequest and walk away from the situation.

OK she might get nothing - but doesn't owe anything either. And no risk of bankruptcy.

again a bit extreme, worst case she could probably sell on the house/freehold with the encumberance of 10 years left on a Lease, that'd probably fetch a fair bit more than her IHT liability on an 800k house

tyllwyd

Did her father get a solicitor to draw up his will? If he did, he must have had terrible advice - I wonder if there is anything to be gained by speaking to the Law Society about them?

JWHAIL

Yes, a solicitor did draw up the will & having spoken to somebody else today it appears that the 10 year lease could also be a major problem. I have been reliably informed it would be extremely difficult under current legislation to get the girlfriend to move out after 10 years. So selling the house with the lease may not be a viable answer. Thats a great idea contacting the law society thank you.

JasX

JWHAIL wrote: »

I have been reliably informed it would be extremely difficult under current legislation to get the girlfriend to move out after 10 years.

that sounds highly spurious advice, did the person giving it hint at any reason for the difficulty? not being a 'long lease' there would be no extension rights and when its up they're gone?

roger196

Did the will set up a trust with g/f as "life tenant" ( or holding the interest in possession) for ten years and your friend as the remainderman. Or did the the will grant a ten year lease (and with what terms) to g/f and your friend holding the freehold reversion.
Sounds like someone has tried a shearing exercise without thinking it through.( Munro v Stamp Duty Comr 1934 and Chick v Stamp Duty Comr 1958 both NZ cases 24.122)
Does the will say anything about who should pay inheritance tax?
Has anyone made any valuations yet and on what basis.
Was the will drafter an expert in IHT planning and can you find out what were his instructions.
Please confirm that estate is in England, (not Scotland as property law there is different)

tyllwyd

Has she had an independent solicitor look at the will - is she certain it is water-tight and that the lease is valid? I wonder if there might be any chance of going to court to argue that it is not what her father would have intended? I know that beneficiaries can sometimes challenge a will because it hasn't provided for them adequately - this will has gone way beyond that and put her in a much worse situation than before, and I can't help wondering if there are any grounds for a challenge.

ManicMum

How awful. Please send her a big hug from me. I can offer no advice but can only send my sympathy. This sounds like the sort of thing to get the press involved in. This girl needs some publicity and for someone to take her case on for her. What do you think?