signing off final accounts

charlie2015

could somebody please advice. me do the final accounts have to be signed off . as a beneficiary of my late fathers will. he died 16 months ago . this seems to be dragging on his house was sold a year ago. the executors will not give any information they are saying via solicitor. it is a capital gains tax issue . this has been going for about a year .I think they are hoping it will go away and they will never have to sign of final accounts the solicitor is holding £5O.000 to cover CGT and his fees how long can this go on .is their a time limit? do the final accounts have to be signed off

dzug1

Could be they are waiting for agreement on how much CGT is actually due


It won't 'go away' but it could last some time yet

SeniorSam

Speak with the soliitors and ask for an explanation about the delay. If tsolicitor is reasonable, ou should receive an answer, but if not, tell the soliocitor that you are considering writing a letter of comlplaint as you feel the delay is excessive.

Sam

konark

A deceased estate does not pay CGT unless the house rose in value between probate valuation and sale. As you have stated the house was sold only 4 months after the death, either house prices shot up suddenly or the house was undervalued in the first place , probably to avoid / minimise IHT. I know which my money's on.

The solicitor is withholding £50k for the CGT which would suggest a capital gain of £250k has occured in 4 months. Was your father's name Rockefeller?

You are right to be concerned by the time taken to wind the estate up. If the house was sold 12 months ago the executors, along with Captain Slow the solicitor, have had ample time to settle any tax liabilities. To be honest I just think they're stringing you a line to stall you.

konark

Sorry, just to add that although there is supposed to be an 'executors year' in which to settle the estate, in effect executors can take as long as they want by claiming complications , bogus or otherwise. Nobody really 'polices' the time it takes to settle estates so the whole thing is a 'dawdlers charter' for inaction. The best course of action should be to keep enquiring about a settlement date., and perhaps also how CGT is owed by a deceased estate. Your final recourse would be to see a solicitor about sueing the executor for maladministration, but I would avoid doing this if at all possible.

Savvy_Sue

Bear in mind that it's not just the sale of the house which might give rise to a CGT liability: shares might shoot up in value between date of death and date of sale.

charlie2015

thanks everyone for your replys .the executors are supposed to be dealing with tax office about the fees .and trying to get off without paying any C.G.T tax . I wonder if there are any penalties because they gave a probate fee of £550.000 and sold the house for £625.000 and sold it about a month later . all the money was in the house no shares . do they have to sign of final accounts ever .I am thinking of asking for inventory and accounts does anybody know how to proceed with this and cost . many thanks

Keep_pedalling

The only way that leap in value will escape CGT is if HMRC decide the original probate value was deliberately valued to avoid IHT, in which case they will be demanding up to £30,000 in IHT plus a possible hefty fine so no wonder the solicitors are holding on to that £50k

konark

By undervaluing the house and paying CGT instead of IHT the executors have saved £15,000 if they get away with it. It is likely though that the executors may find themselves in a room with HMRC explaining how a house can rise in value 14% in a couple of months.

Keep_pedalling

Was your father a widower? I just noticed you said all of the value was in the house, so if he was, and his wife had left everything to him, then all the estate would be covered by the nil rate band so there would be no IHT and the executors could argue that they made a genuine mistake and should not need to have to pay CTG either.

If on the other had he was devorced or never married then there is £30k of IHT to pay.

getmore4less

Key data

What's the total taxable estate value?(based on the probate value for the house)

What nil rate band are they using?

edit
If you had researched the house what value(range) would you have put on it.
(ie ascertain if the solicitors were way out from the market data at the time)