inheriting a property - IHT form asks if I intend to sell it within a year?

ganbariya

Hello,


My mother left me her house in her will, and I'm filling in the IHT forms to get Probate.


The IHT405 schedule asks, "do you intend to sell... within 12 months of the date of death?"


Frankly I'm not sure what my intentions are. I'm split between selling it and letting it. My mum's house makes me quite emotional and I find it hard to make a decision.


Does anyone know why they ask the question? What difference does it make to me whether I answer yes or no? Presumably whatever my intention is now, I'm still allowed to change my mind.


With any luck this is the final IHT/Probate question that has me stumped, and then I can send the forms. Yey!


Thanks in advance.

getmore4less

Is there IHT to pay

antrobus

ganbariya wrote: »

...My mother left me her house in her will, and I'm filling in the IHT forms to get Probate.

The IHT405 schedule asks, "do you intend to sell... within 12 months of the date of death?"...

The question is addressed to you as executor of the estate. It is not addressed to you as beneficiary of the estate.

ganbariya

Yup, there's IHT to pay. Valuation of the property is above the IHT threshold.

ganbariya

Thank you antrobus - that distinction hadn't occurred to me!


So I now have even more options to choose between... sell it as executor, and disburse the funds to myself, or transfer the house to myself, and then sell it. Is there a difference between the two routes...?

Kayalana99

I would imagine as executor you would have to sell the house to pay any outstanding debtors/pay off debtors with own money and not sell the house (or to divide among more than one person in the will) but if this doesn't apply to you as there is nothing to pay, it wouldn't matter either way as you would essentially be giving yourself the house. I'd probably want some legal advice though really as I'm just putting 2 and 2 together and may be way off.

brewerdave

The critical Q is has the estate got sufficient "free" money to cover the IHT ? Yo won't get probate without some agreement with HM Revenue.

Yorkshireman99

brewerdave wrote: »

The critical Q is has the estate got sufficient "free" money to cover the IHT ? Yo won't get probate without some agreement with HM Revenue.

In this situation there are provisions to pay the IHT in instalments. The OP really needs to take paid for professional advice.

ganbariya

Thanks for all the replies. Yes, there is adequate cash in the estate to pay creditors, IHT and legatees. The banks are prepared to use the direct-to-HMRC payment scheme to settle the IHT.


Yorkshireman99, what element of the situation concerns you sufficiently to resort to paid-for advice? My original post regarding the question of "do you intend to sell... within 12 months of the date of death?"


Thanks.

Yorkshireman99

ganbariya wrote: »

Thanks for all the replies. Yes, there is adequate cash in the estate to pay creditors, IHT and legatees. The banks are prepared to use the direct-to-HMRC payment scheme to settle the IHT.


Yorkshireman99, what element of the situation concerns you sufficiently to resort to paid-for advice? My original post regarding the question of "do you intend to sell... within 12 months of the date of death?"


Thanks.

The whole question of when to sell, payment of IHT and avoid any pitfalls. It should not cost more than a few hundred pounds and is likely to save you more.

EasySolution

The point of the question is as follows.
The estate is being assessed for IHT based on the value at date of death.
It is notoriously difficult to value a property so this question exists so that the Revenue do not close their file and give a Clearance Certificate because they will assess the IHT based on the actual sale value.

Example:
Estate has a house est value 450K and money actual value 75K total £525K
IHT 80K
House sells for 425K IHT now reduced to 70K
House sells for 475K IHT now increased to 90K if box ticked
House sells for 475K box not ticked CGT implications