Land, Probate & HMRC Estate Returns Form

JillyCornwall

I am doing the Probate application for my Mothers estate. Its pretty straightforward apart from a piece of Agricultural Land that is in Mums will but was gifted & transferred into my brothers name back in 2005. Under the 7 year rule this has to be included on the HMRC Estate return but I'm not totally clear what I put the value as. The Estate is well below the IHT level and I'm told Agricultural Land does not have IHT anyway-even so its still part of her Estate & has to be listed.
The land has a value of 80,000.
Do i take off 6yrs of 3,000 per year (allowed gift value) and put in 62,000? Is that how it works. I've read the HMRC website guidelines but get more confused the more i read it, they don't use everyday words. I asked the same question on Answerbank & one reply said that the £3000 gift is only for cash and of that amount but I think thats wrong the way I read HMRC...who is right..or are neither of us?? Thanks

getmore4less

If the total estate is well below the £325k including the £80k then the HMRC capital office will probably be able to help.

They will probably not be too bothered with the fine detail if there is no tax to collect.

Was the land assessed and gifted properly at the time.
(no idea what is needed for land with special status)

Was there any chance this was a gift with reservation and needs current value.


If you don't need to use the annual allowances of £3k or the multiple £250's which may have been used elsewhere don't.
( I don't think you an use them for this gift anyway but would need to check)


Links to what you have been reading may help people point out what they mean.

JillyCornwall

Yes the land was valued & transferred from my Mothers name to my brother and it was Registered with the land Registry. She also changed her will to include the gift to him. She had no income or involvement with the land over that period. I think I'll just put the full value in.
As for links to what I've been reading...the nearest to explaining is for gifts this:


http://www.hmrc.gov.uk/inheritancetax/iht-probate-forms/help-iht205-C5/gifts.htm

getmore4less

JillyCornwall wrote: »

Yes the land was valued & transferred from my Mothers name to my brother and it was Registered with the land Registry. She also changed her will to include the gift to him. She had no income or involvement with the land over that period. I think I'll just put the full value in.
As for links to what I've been reading...the nearest to explaining is for gifts this:


http://www.hmrc.gov.uk/inheritancetax/iht-probate-forms/help-iht205-C5/gifts.htm

I read that link as saying £3k in the year of transfer and posibly another £3k from the year before. later years won't count.

but that does not take into account any special status of the transfer.

are you doing a IHT205 or IHT400

JillyCornwall

I am filling in IHT205 (2006) again confusing as its titled IHT206 but is in fact 205 (06)
I think I'm just going to put full value in..ringing HMRC is such a pain and it seems everyone is as confused as I am..LOL...I don't think they can complain if its over valued can they and its looking as though it would only be £6000 anyway so really not that important. Thanks all for your help.

John_Pierpoint

The land has a value of 80,000??.
How many acres and what is growing on it? Or alternatively how much does it yield in single farm payment?
Agricultural land is only exempted from IHT if the OWNER farms it.
Landlords get some IHT relief but not 100% .
If IHT were an issue then I would advise getting specialist advice.

[What was the position with the CGT when it was transferred? Was it not re-registered with the Land Registry at that the time of its disposal? (rhetorical question) So why would your mum mention in her will something she did not own? It kind of suggests she still thought she had some sort of control over it?]

http://www.is4profit.com/is4money/tax/farmland-tax-planning.html