probate, two parents

MoneyJuggler

Hi,

Sorry for your loss, have been through similar situation recently, having lost my mother in November, father some years before. We were under IHT limit, but at one point thought we wouldn't be.

We had to submit the IHT forms at the same time as applying for probate -they went through the probate office and they pass onto HMRC.

We got 3 valuations on house, just to be sure and took an average of the three.

At one point it looked like we might bring into play my father's IHT allowance, but in the end didn't need to, point being as I understood it we could have done.

With the forms (we only needed the 205), I filled it in myself, but then paid a solicitor to check it through - a compromise, but I would definitely advise taking some legal advice on all this, as 40% is such a lot of money! Also for me, at such a stressful time I felt I needed an objective opinion to make sure I hadn't missed anything.

Also, the time limit on paying IHT, I would understand the need (from HMRC) to keep things moving, but what happens if you can't pay within that timeframe? (reasonable if there is a house sale involved that it would take longer? ).

Might be worth ringing them to ask, as I suspect that they charge some interest on the final amount, were any IHT due, but that might be less of an amount than say if you had to sell house in a hurry.

Rach39

I don't think you can 'void' the Deed of Variaton for your dad's Estate as the Estate was administered and finalised presumbly bearing the variation in mind. I think your calculation of yesterday morning is about right - transfer the remaining percentage unused nil rate band from your Dad and (to be on the safe side) complete an IHT400 (really they're not as bad as you may think!!)

Savvy_Sue

I agree, I don't think you can void the DoV. Also I'd recommend getting at least one more valuation.

I don't know if it makes a difference, but when Dad died we asked for a valuation for probate (no plans to sell the house at that stage). We had to pay for that, but it was money well spent not to then be hassled by estate agents ignoring the instructions we would have given that Mum was continuing to live there and didn't want to sell.

And that fee was of course deducted from Dad's estate as a necessary expense.

getmore4less

One possibility would be to ignore or void the Deed of variation. That would simplify matters. The only issue would be if HMRC claimed that as it had existed it had already reduced my father's limit. Certainly it did not stop the whole house being transferred to my mother

Now I am confused, if the house passed to mother and there is only £150k for the rest, what was used to create the £200k trust and who are the trustees?

srcandas

getmore4less wrote: »

Now I am confused, if the house passed to mother and there is only £150k for the rest, what was used to create the £200k trust and who are the trustees?

Yup seems odd but there it is. When I get my hands on some paper work hopefully all will be clear. Sadly still some treading on water going on there but if need be I will do a search and get to it. It certainly was set at £200,000 estimated as being half the house value and the house is certainly in my mother's name (I am informed by my brother).

I tried the HMRC helpline and they were very helpful as to form completion. They confirmed that the 400 and its supplements (esp. 402) would be needed as we were not transferring 100% of my father's allowance (despite what it said in the notes).

They also confirmed that I should send the PA1 and the 400 and friends in together. I pointed out the obvious floor in that I could not get official evaluations until probate was granted. They agreed it was a catch 22 and said I should estimate. They also suggested that the process, as I was within the limit, would take days and not weeks :cool: We will see.

I'll certainly try and get another house evaluation. Luckily the last one was free. They said they normally charged but as I had been recommended by an ongoing client of theirs ......

Well many thanks to you all. It really does help getting feedback even if it simply raises a question, and certainly you've offered a lot more than that:) What with family issues it still feels like I am in the front line but at least the artillery (you lot) are still booming away behind :beer:

Savvy_Sue

Both HMRC and probate office are usually very helpful in these situations.

Estimates are accepted, and as long as the actuals still bring you in under the IHT threshhold there's no problem.

getmore4less

what valuations are you having trouble with?

Most institutions will give them with just a death cert and telling them you are executor. Some may want a copy of the will to show your were a named exec. (Santander are a nightmare on getting stuff done)

HMRC are turning around the forms quickly(reports elsewhere) to allow probate although they may follow up on some things. AIUI houses go to the valuation office automaticaly to check they are sensible.

At end of the day probate is a formality, it is the execution of the duties and making sure the estate is dealt with properly that is the crtical bit.

The previous estate seem to need some investigations to find this trust.

It could be that 1/2 the house was supposed to be held in trust for you two with mum as the trustee which might explain the transfer to her

If they were joint tenant then the house would be hers and not able to be put in trust.

I would investigate further in case there is an issue and the trust setup means the full house value is sill assesed as part of mums estate.

I tried reading up on trusts for my own planing and it is complicated s o I only know you have to check very carefully

For the house valuation do some of your own research, we got close for the one we are dealing with. we got one for from a EA for probate(so it was writen up in detail) and the other we just asked for a sale valuation.

Just use right move and search for similar in the erea, widen the areas if none close. Then look at sold prices.