Inheritance Tax form

greenone_2

Hi,

Sorry if this has been asked several times but everytime I start to think about this my brain turns to mush...

I recently lost my wife, I have managed to complete most of the paperwork but have problems with this form.

Background :-

She didnt leave a will

We had been married for 11 years, jointly own a £280,000 house with about £127,000 on the mortgage.

She had 3 children, 1 over 18 and 2 under 18, the 2 eldest are my step children (Eldest not dependant and lives away) the youngest is our child together.

She had no life insurance as we needed to move after she was diagnosed with cancer and could not get insurance. I did however receive a £110,000 lump sum pension payout for her. All of our bank accounts and savings were in our joint names.

So, my main question is, Is her share of the house (Less the debt) part of the estate? Or do I need to have it valued and included

I have tried reading guidance notes but I as I said, my brain is mush and I would really appreciate some 'Big writing and colourfull pictures' type help please.

Kind Regards
Chris

PippiShortsock

Hi Chris

I just wanted to offer my condolences on your wife’s death. You must be going through a hellishly difficult time.

I’m not an expert on inheritance tax, but I don’t think you should worry. As her spouse, anything you inherit should be exempt from inheritance tax. In any case, her share of the house is nowhere near the IHT exemption allowance, and I don’t think the pension lump sum payment to you is taxable (although any ongoing pension sum to you would be). As you've been asked to fill in an IHT form, I think you will need to include the value of her share of the house - just ask an estate agent to pop round to give a written valuation. You could always suggest you were thinking of downsizing.

Take care of yourself and your children and don’t feel that you need to rush with any decisions. Talk to the Citizens' Advice Bureau if you need any help.

Pippi

Savvy_Sue

You can also phone the probate office for advice, they are usually extremely helpful and sensitive.

There's no rush for this, but remember that you'll now be entitled to a single person discount on your council tax. They'll backdate it to her death, whenever you report it.

And my condolences too.

Crabapple

Sorry for your loss and that you are now confused about all the paperwork. Like Sue says, there is no rush to deal with these things so take a step back and try not to worry too much.

From the figures you mention and as most if not all the assets will pass to you as joint assets, there's no need to be concerned about Inheritance Tax.

You should (when you are ready) get values for half of all the assets - house, less half the mortgage, and the joint accounts. This is so you know the value of the estate.

It's a bit fiddly in a way because joint assets do form part of the Estate for IHT purposes (for the declarations and papers) but not for distribution as they will pass to the survivor. You will however need to check exactly how you hold the house as half of that might be part of the Estate, but would still pass to you under the intestacy rules.

I'm conscious this is going to start sounding more complicated than you want right now. Start with noting the values, do as pippi suggests to get a value for the house, and feel free to post here again for more advice when you need it.

Mojisola

greenone wrote: »

We had been married for 11 years, jointly own a £280,000 house with about £127,000 on the mortgage.

I did however receive a £110,000 lump sum pension payout for her.

All of our bank accounts and savings were in our joint names.

Do you ned to be filling in any forms?

When Mum died, the house ownership was as "joint tenants" and all the accounts were in joint names so everything passed automatically to Dad. As all that was remaining were her personal possessions which weren't worth very much, we didn't have to go to probate.

getmore4less

One advantage of completing the IHT forms is it establishes the transferable nill rate band with HMRC in case you lose the paperwork needed to claim it later.

AIUI this can be done independent of probate if wanted.

greenone_2

Thanks everyone - I finally felt ready to get this going - the person I spoke to at the probate office was very helpfull and gave very simple answers to all of my questions

Thanks!

g6jns_2

greenone wrote: »

Hi,

Sorry if this has been asked several times but everytime I start to think about this my brain turns to mush...

I recently lost my wife, I have managed to complete most of the paperwork but have problems with this form.

Background :-

She didnt leave a will

We had been married for 11 years, jointly own a £280,000 house with about £127,000 on the mortgage.

She had 3 children, 1 over 18 and 2 under 18, the 2 eldest are my step children (Eldest not dependant and lives away) the youngest is our child together.

She had no life insurance as we needed to move after she was diagnosed with cancer and could not get insurance. I did however receive a £110,000 lump sum pension payout for her. All of our bank accounts and savings were in our joint names.

So, my main question is, Is her share of the house (Less the debt) part of the estate? Or do I need to have it valued and included

I have tried reading guidance notes but I as I said, my brain is mush and I would really appreciate some 'Big writing and colourfull pictures' type help please.

Kind Regards
Chris

My condolences Chris as it must be hell for you. Glad to hear the Probate Office were up to the their reputation. Plenty of help here if you need it. Good luck.

RAS

Chris - sorry for your loss.

Being horribly pragmatic, please talk to a lawyer as soon as possible and make a will.

Apart from the need to appoint guardians if anything more was to go wrong; at present the rules of intestacy would leave the entire estate to your joint child and nothing to the dependant step-child (they could sue but that makes for poor future relations between the siblings).

You might also want to think about whether the older child could be a future attorney for LPA and if not, who you would appoint?

greenone_2

RAS wrote: »

Chris - sorry for your loss.

Being horribly pragmatic, please talk to a lawyer as soon as possible and make a will.

Apart from the need to appoint guardians if anything more was to go wrong; at present the rules of intestacy would leave the entire estate to your joint child and nothing to the dependant step-child (they could sue but that makes for poor future relations between the siblings).

You might also want to think about whether the older child could be a future attorney for LPA and if not, who you would appoint?

Wow! Thank you, I had no idea about this! One more grim but necessary thing to do I guess