Inheritance tax bill/probate query - help!

kmeast

Oh dear ... confused.com!!

So basically the inheritance tax should be paid out of the assets first - does that mean it would come from other assets first before affecting the bond for the grand kids? Would it affect my inheritance of 1/6th of the house if there is enough money to pay it from the other assets?

I suspect someone else wants us to pay for it rather than coming out of what they will receive?

daska

TBH wills and trusts get very complicated and none of us know enough of the details. I'm wondering if it's possible that there might be an 'exit charge' when the property is released from the trust, but I would have thought it more likely that the figure would be related to the value of the property at that point? You really need to contact the solicitor.

RAS

Hi

I suspect that step-mum is playing a couple of games.

One is that she wants to secure the roof over her head.

The second is that if the house had been a joint tenancy, it would have passed to her as the surviving tenant and would have been excluded from the estate for IHT purposes, so in her head the fact that house has been left to you (6) rather than to her means that the IHT has to be paid, whilst the estate might have escaped if she had been joint tenant. Which is why she want you to pay the IHT rather than reduce whatever is left to other beneficaries.

This seems a bit steep to me as if your portion is £12K, then the house is worth £180K by my reckoning and the value of the estate is around £500K. SO the money left elsewhere would amply cover the IHT.

You really really need to know what was in the will. I am surprised the solicitor setting it up did not suggest an insurance policy or something to cvoer the IHT liability.

daska

As a general rule, if the tax man is involved, he'll want his money before anybody else gets theirs. Do you know if probate has been granted? If it has then the will is a public document, until then I believe the executor doesn't have to provide sight of it.

One other question is: if the house is in trust then who is responsible for maintenance. Sorry, I know you don't need more on your plate but you don't want to inherit something that's falling down.

kmeast

daska wrote: »

As a general rule, if the tax man is involved, he'll want his money before anybody else gets theirs. Do you know if probate has been granted? If it has then the will is a public document, until then I believe the executor doesn't have to provide sight of it.

One other question is: if the house is in trust then who is responsible for maintenance. Sorry, I know you don't need more on your plate but you don't want to inherit something that's falling down.

Thanks - not sure if probate has been granted yet or not.

Only half the house is in trust, the other half is step-mums. Dad just left us his share to ensure that we received some inheritance (all be-it in many years time!) & it did not just pass on to step-mum's family on her death.

thorsoak

kmeast wrote: »

The call came from by step-mum who said she had been speaking to the probate solicitor. I believe the house has been valued at £350k.

If the whole of the house has been valued at £350k and your father and stepmother owned it as tenants in common, then only half the value of the house £175k should be taken into consideration in the estate valuation.

The current tax free allowance for an estate is £325,000 - therefore if there is an IHT liability, there is a lot more of value in his estate than just his half of the house - so the IHT should come out of that.

Johnhowell

KMEast,

Re-post in the Cutting Tax forum where there are many knowledgable posters who can help you further.

John