Clarification of Inheritance Tax process

RAS

yorksquine wrote: »

One of the Executors was Dads solicitor, the other my sister as I live a long way off. It would seem that the solicitor had made assumptions about the size of the estate and then fell out with the financial advisor who had done far better with investments than assumed! It is the solicitor who has been dealing directly with HMRC and saying that they have been taking a long time over things and that they (solicitors) are not prepared to take out a loan!!

I suggest that you ring the Law Society and ask the name of the senior person to whom complaints are made at that solicitors, and your sister starts with a simple phone call. If necessary, she needs to put in a formal complaint about the way the case is being handled.

troubleinparadise

I agree with RAS - it sounds as though the solicitor executor has let you and your sister down somewhat - they of all people should have the expertise and knowledge of the process, and know not to make assumptions.

I suspect the blaming HMRC for delays etc and falling out with the IFA for investment over-performance is a smokescreen to hide incompetency...

Whilst the "process" can be arduous, it is what it is, and HMRC provides lots of guides online and on the phone, so if the layman can get it right, a solicitor certainly should do.

yorksquine

Will let dust settle and see whether Sis is up for questioning competency. Suspect not, but like I said - we have learned a valuable lesson!

troubleinparadise

Good luck with sorting this out, but sorry that less than competent professional advice has landed you in this situation.

It might give you a bit of a negotiating tool for discussing the fee rate when the dreaded day of reckoning arrives!

John_Pierpoint

Did you actually have IHT to pay ? I was in the fortunate position of being able to finance the IHT without borrowing or involving other financial institutions in the transaction. Perhaps that in itself was grounds for giving my paperwork the fine toothed comb treatment?

[I found myself in a 6+ week "black hole", while I wondered if my documents had got lost in the post. Even the permission to go & get probate took a week to arrive. When one is dealing in 6 figure sums one would think they could afford a first class stamp? It then took another couple of weeks to get an appointment at the probate registry to swear the documentation. I think "the executor's year" is a reasonable time frame, if you are trying to manage expectations.]

ameliarate

I had no idea that you had to pay IHT BEFORE you get probate:eek:. How ridiculous is that? Do they seriously think people have loads of money hanging about to pay such things with out of their own pocket? As if everything isn't stressful enough. By the time we have paid IHT, Solicitors, Inland Revenue and interest on loans to pay IHT there will be sod all left anyway. :mad:

nom_de_plume

At worst, inheritance tax is not due on estates valued at or below £325,000 and that figure could be doubled with joint (husband's and wife's) combined allowances so not quite as bad as you make it out to be.
My recent first attempt at probate involved less that £1,000 solicitors' fees and no borrowing whatsoever. This was on an estate with a tax bill significantly over £100,000
In fairness, I did use my own money initially to pay for the funeral and a few other bills but the funeral could certainly have been covered direct from the estate.

ameliarate

nom_de_plume wrote: »

At worst, inheritance tax is not due on estates valued at or below £325,000 and that figure could be doubled with joint (husband's and wife's) combined allowances so not quite as bad as you make it out to be.
My recent first attempt at probate involved less that £1,000 solicitors' fees and no borrowing whatsoever. This was on an estate with a tax bill significantly over £100,000
In fairness, I did use my own money initially to pay for the funeral and a few other bills but the funeral could certainly have been covered direct from the estate.

I am talking about an estate of approx £1 mill! no inheritance tax planning whatsoever as the death was very sudden and unexpected in a relatively young woman.

yorksquine

ameliarate wrote: »

I had no idea that you had to pay IHT BEFORE you get probate:eek:. How ridiculous is that? Do they seriously think people have loads of money hanging about to pay such things with out of their own pocket? As if everything isn't stressful enough. By the time we have paid IHT, Solicitors, Inland Revenue and interest on loans to pay IHT there will be sod all left anyway. :mad:

Glad to see its not just me who is righteously outraged! I (we?) am not indignant about the tax itself, its paying all and sundry straight off for 'administering' when you may have nothing to begin with.

MrsMouth

Is there actually cash in the bank accounts that can be used to pay the IHT rather than a loan being taken out?

Pretty much all of the high street banks offer a facility where they can send the money from cash/investments etc directly to HMRC to pay the liability.