Clarification of Inheritance Tax process

yorksquine

I would really welcome comments on a letter just received from the solicitor (who is also executor) addressed to both my sister and me.

I have typed the relevant passages of concern verbatim below. I'm sorry if this is too long but its how it came.

"" I refer to my letters to you both dated 3rd May and 12 June (dad died on 9th April). In these letters I estimated our costs for dealing with the estate at £2K - £3K. At the time the estimate was given, it was not appreciated that Inheritance Tax was payable or that there would be so much work involved in making the immediate payment of tax due on death. You will appreciate that I have done a considerable amount of work in this respect and, that I have now almost exhausted the estimate of costs given.

The remainder of work to be done, is realising or transferring the assets and the payment of the debts, also distribution of the estate, obtaining the final discharge for Inheritance Tax and, dealing with the Income TAx to date of death and for the administration of the estate. For the remaining work I would anticipate that my costs would be a further £3K plus VAT"""

RAS

Not exactly surprising; it cost more than that to extract the will from the lawyers trying to force us to use them. A lot of lawyers go for 1-2%.

madbadrob

So they are saying that there will be about 5 to 6k in costs which sounds about right to me.

Rob

John_Pierpoint

In my case the legal costs were £300 plus VAT.
These were because I realised that the will, that appointed me as sole executor, had been badly written and tried to leave part of "the residuary" to two people who had died.
My own research, and a lively exchange of opinions on here, confirmed to me that I now, in effect, had two estates; one to be administered by the rules of the will and the other to be administered by the rules of intestacy.
This resulted in a distribution that was probably not what the deceased would have intended had he been able to re-write his will on his death bed.
So with still 10 of a dozen beneficiaries needing an explanation, I realised I would need "an official" confirmation of how I was distributing the estate.

So the £300 plus tax, bought a nice letter under a STEP solicitor's letterhead explaining the beneficiaries distribution in minute fractions of the estate.

[I also had to do some extensive investigation in how to apportion the expenses]

MrsMouth

I think that's a fair cost for dealing with a taxable estate which involves combat with HMRC.

yorksquine

Thanks for the feedback everybody. Sis and I have learned a lot from all this.