query

transformer1977

Hi

Hope you can help.

My dad passed away recently. All bank accounts and property are in joint names with my mum. Well below the threshold for inheritance tax. Do I need to tell the HMRC we dont owe anything?

Bank have not asked mum for probate and just changed accounts to her sole name.

Any help would be great because I don't want to miss anything.

Many thanks

g6jns_2

transformer1977 wrote: »

Hi

Hope you can help.

My dad passed away recently. All bank accounts and property are in joint names with my mum. Well below the threshold for inheritance tax. Do I need to tell the HMRC we dont owe anything?

Bank have not asked mum for probate and just changed accounts to her sole name.

Any help would be great because I don't want to miss anything.

Many thanks

If there is a valid will the executors need to get probate and distribute the estate according to it. If there is no will someone needs to apply for letters of administration. Doing nothing really is not an option even if the estate is below the IHT threshold.

pmlindyloo

Probate is not always needed especially if everything is in joint names.

A useful guide:

http://www.adviceguide.org.uk/england/relationships_e/relationships_death_and_wills_e/dealing_with_the_financial_affairs_of_someone_who_has_died.htm#do_you_always_need_probate_or_letters_of_administration

Crabapple

If they are all joint assets (*see below re property) then you don't need to get a Grant and don't need to tell HMRC. Even if the estate was over the Inheritance Tax threshold if it all passes to a legal spouse then it will be exempt from IHT.

*Check the house though - if it is held as joint tenants it can be transferred easily by providing a copy of the death certificate to the Land Registry together with their form I think it's DJP.

If it is held as tenants in common though you would need to get a Grant to transfer it. Also then you would need to consider whether there is a Will leaving everything to your mother or the intestacy rules are involved in which case the value of the house will make a difference.

I would suggest that your family keep records of the value of the Estate now and what happens to it. This is so that if your mother's estate down the line is over the IHT threshold you have evidence to claim the transferable nil-rate band for IHT.

g6jns_2

Crabapple wrote: »

If they are all joint assets (*see below re property) then you don't need to get a Grant and don't need to tell HMRC. Even if the estate was over the Inheritance Tax threshold if it all passes to a legal spouse then it will be exempt from IHT.

*Check the house though - if it is held as joint tenants it can be transferred easily by providing a copy of the death certificate to the Land Registry together with their form I think it's DJP.

If it is held as tenants in common though you would need to get a Grant to transfer it. Also then you would need to consider whether there is a Will leaving everything to your mother or the intestacy rules are involved in which case the value of the house will make a difference.

I would suggest that your family keep records of the value of the Estate now and what happens to it. This is so that if your mother's estate down the line is over the IHT threshold you have evidence to claim the transferable nil-rate band for IHT.

There is a potential problem depending on how the property is held. As you correctly say it may be possible to do without probate or administration but many people don't know the difference between joint tenants and tenants in common. Nor is it always apparent from Land Registry entries. Also if an estate is dealt with formally it precludes any nasty surprises of any unknown creditors appearing in future assuming the correct statutory notices are published. You may think this is overkill but having seen the trouble it can cause it is to be avoided.

pmlindyloo

Dealing with this can be difficult.

You can find help by contacting your nearest probate Office.

http://www.lawontheweb.co.uk/Probate/Probate_Offices

getmore4less

One advantage of completing the HMRC capital returns and tidying up the Income tax situations is it means HMRC have the records for the calculation of the transferable nil rate band should it ever be needed (does not require probate/admin to do this).

If it can be done without the grant is save a bit of money since the fees went up.

Mojisola

transformer1977 wrote: »

My dad passed away recently. All bank accounts and property are in joint names with my mum. Well below the threshold for inheritance tax. Do I need to tell the HMRC we dont owe anything?

g6jns wrote: »

If there is a valid will the executors need to get probate and distribute the estate according to it. If there is no will someone needs to apply for letters of administration. Doing nothing really is not an option even if the estate is below the IHT threshold.

This was the situation when Mum died - most accounts were in joint names and the property was owned as joint tenants. We did not need to get probate.

There were a few small insurances which paid out on production of the death certificate and the will. All joint accounts were changed with the same evidence. The couple of things that were in Mum's name were closed down and a cheque sent to Dad after seeing the death cert and the will.

g6jns_2

Mojisola wrote: »

This was the situation when Mum died - most accounts were in joint names and the property was owned as joint tenants. We did not need to get probate.

There were a few small insurances which paid out on production of the death certificate and the will. All joint accounts were changed with the same evidence. The couple of things that were in Mum's name were closed down and a cheque sent to Dad after seeing the death cert and the will.

You may have been lucky. Not getting probate can cause serious problems in the future. It is not, repeat not, a step to be taken lightly. I personally know of two cases where hidden debts came to light and the executors had to pay the costs and in one case this was into five figures. Not common but sufficiently so to be worth considering. It really is not that difficult to do though it can be time consuming.

growler834

Mojisola wrote: »

This was the situation when Mum died - most accounts were in joint names and the property was owned as joint tenants. We did not need to get probate.

There were a few small insurances which paid out on production of the death certificate and the will. All joint accounts were changed with the same evidence. The couple of things that were in Mum's name were closed down and a cheque sent to Dad after seeing the death cert and the will.

This was also the situation when my mum died & everything was in joint names with dad. As far as we can be sure we are happy that there will be no creditors coming out of the woodwork for mum. She only had her small state pension as income which DWP have sorted out (so no overpayment there), she wasn't a secret shopper (in fact she had to be talked into treating herself) and I would be very surprised if she was a closet gambler! In the very unlikely event that someone comes forward as a creditor in the future, dad, as executor, can pay them from the cash left over from mum's insurance policy.

Mojisola

g6jns wrote: »

You may have been lucky. Not getting probate can cause serious problems in the future. It is not, repeat not, a step to be taken lightly. I personally know of two cases where hidden debts came to light and the executors had to pay the costs and in one case this was into five figures. Not common but sufficiently so to be worth considering. It really is not that difficult to do though it can be time consuming.

It wasn't taken lightly. I had been managing Mum and Dad's finances for some years. There was no possibility of hidden debts. There were a couple of small overpayments from the DWP which were dealt with quickly but nothing else.

With almost all their money in joint accounts, it automatically became Dad's money anyway.