Probate and inheritance tax query

wwl

getmore4less wrote: »

get the IHT 205band IHT300 form set read through ALL of them and

IHT400, not 300

troubleinparadise

Don't try to avoid IHT by tweaking the figures on the forms - you sound relatively close to the threshold amount, and HMRC are not fools, and will check.

As the estate also sounds quite large (in excess of £650,000 after debts), then the cost of some legal advice to check you've understood the forms properly would be money well spent.

mothballs39

Thanks everyone. I've had a local solicitor recommended by several people so have asked for a meeting with them, hopefully this week. I think a Deed of Variation is the way to go but will see what they say. We are very close, if not over, the IHT threshold and realise that even if it genuinely is just under, HMRC will check everything with a fine toothcomb. I'd feel much happier taking legal advice at the outset especially as I'm sole executor and an only child. The whole thing is quite daunting.

troubleinparadise

mothballs39 wrote: »

Thanks everyone. I've had a local solicitor recommended by several people so have asked for a meeting with them, hopefully this week. I think a Deed of Variation is the way to go but will see what they say. We are very close, if not over, the IHT threshold and realise that even if it genuinely is just under, HMRC will check everything with a fine toothcomb. I'd feel much happier taking legal advice at the outset especially as I'm sole executor and an only child. The whole thing is quite daunting.

Good move, Mothballs39.

I'm sorry for your loss of your mother - it is a difficult time, and getting your head around the necessary bureaucracy is a big challenge alongside dealing with your emotions.

A few hundred pounds spent wisely could take away some of your stresses just now, and it really is a drop in the ocean with regard to the size of the estate.

Good luck

nom_de_plume

mothballs39 wrote: »

Hi, my father died in 2009 and my mother died a few days ago

Just for clarity, are we talking of an estate worth around £325,000 or £650,000 and, if the latter, did your father leave anything to others or did it all just pass to your mother? Also, were they married?

mothballs39

troubleinparadise wrote: »

Good move, Mothballs39.

I'm sorry for your loss of your mother - it is a difficult time, and getting your head around the necessary bureaucracy is a big challenge alongside dealing with your emotions.

A few hundred pounds spent wisely could take away some of your stresses just now, and it really is a drop in the ocean with regard to the size of the estate.

Good luck

Thanks for your kind words troubleinparadise

mothballs39

nom_de_plume wrote: »

Just for clarity, are we talking of an estate worth around £325,000 or £650,000 and, if the latter, did your father leave anything to others or did it all just pass to your mother? Also, were they married?

We're talking £625,000, after deducting other bequests in my father's will. Yes they were married.

Thanks again everyone. Hoping to arrange a solicitor's meeting tomorrow.

getmore4less

Make sure you do the transferable nil rate band correctly if dad died before April 6 2009.

The uplift of the current nil rate band is based on the unused % of the nil rate band at that time.

wwl

mothballs39 wrote: »

We're talking £625,000, after deducting other bequests in my father's will. Yes they were married.
.

Bequests in the will don't affect estate value for IHT , though some charity bequests can be offset I believe.

mothballs39

Update: Spoke to a solicitor today. She said it's only worth doing a Deed of Variation after probate to show that the increased amounts to family members were from the original estate and not gifts from me (in case I pop my clogs in the next seven years!). A Deed of Variation now wouldn't alter the fact that I have to pay inheritance tax. After the house valuations this morning we're well over the IHT limit. Apparently the house has increased in value by 200k in 6 years. Crazy!

What I don't understand is if you do a Deed of Variation to show that you're not keeping all the money, why aren't you then exempt from IHT, or least get it refunded later? I will, in effect, only be a filter for a lot of the money being transferred on to other relatives.

Please could someone clarify the donation to charity option if we varied the will as it stands? Can we donate the correct amount so that it takes us below the IHT threshold or does it have to be at least 10% of the entire estate? I think the latter, but just need to check.

Getmore4less: Just to clarify, my father died in December 2009 so tax thresholds were the same as now.

Thanks everyone.