Unmarried with children - no will

Yorkshireman99

securityguy wrote: »

I know my own tax affairs. I don't know my wife's financial affairs, at all. Were she to die, there would be a fair amount of guesswork. If your claim is that any significant proportion of the population have detailed financial records accessible to third parties, I have a bridge to sell you.

Talk to your wife and persuade her to make sure she leaves some details to make her executors job much easier.

EachPenny

securityguy wrote: »

If it came to it, the tax man would, if suspicious, have to prove his case by looking at 7 years' bank statements and asking "what was this transfer".

Would he? Or would he simply ask the bank for a list of all transactions over a certain amount, say £1000, in the last 6/7 years and then forward that list on to the executors and request details of each transaction?

Even if the legislation doesn't permit the taxman to do that today, don't assume that he won't be able to do it in 7 years time. They have a habit of shifting the goalposts

Yorkshireman99

EachPenny wrote: »

Would he? Or would he simply ask the bank for a list of all transactions over a certain amount, say £1000, in the last 6/7 years and then forward that list on to the executors and request details of each transaction?

Even if the legislation doesn't permit the taxman to do that today, don't assume that he won't be able to do it in 7 years time. They have a habit of shifting the goalposts

Asking for details of all the transactons over the last seven years is exctly what HMR&C may do and their default position will be to assume that they are gifts that are not exempt. It is incredibly short sighted to keep your spouse in the dark in this way. Even if the estate is unlikely to attract IHT situations do change so it is still sensible. Anyone who has been on the wrong end of an agressive HMR&C investigation would not wish it on their executor or spouse.

securityguy

EachPenny wrote: »

Would he? Or would he simply ask the bank for a list of all transactions over a certain amount, say £1000, in the last 6/7 years and then forward that list on to the executors and request details of each transaction?

In my case, that would be literally hundreds of transactions. Every month, a transfer from my sole name account to the joint account, for a start off. Plane tickets. Holidays. Cars. Laptops. All of it paid for from income.

It's possible that somewhere there are a small number of goodie-twoshoes who could tell you, six years later, what a particular payment was for. Aren't they good? Since MSE is full of people saying "I am the executor for my intestate father, I have no records" and the punchline is not "and I was refused probate", we can assume that HMRC take a risk-managed view of this. Since the claim that started this is that if I pay for a holiday from a sole name account that might be a gift, the standards of record keeping required would involve knowing who was travelling on a particular plane ticket payment.

securityguy

Yorkshireman99 wrote: »

Asking for details of all the transactons over the last seven years is exctly what HMR&C may do and their default position will be to assume that they are gifts that are not exempt. It is incredibly short sighted to keep your spouse in the dark in this way.

The reason joint taxation was abolished was precisely so that people could maintain privacy in their financial affairs. Anyway, IHT is not payable on transfers between spouses.

Yorkshireman99

securityguy wrote: »

The reason joint taxation was abolished was precisely so that people could maintain privacy in their financial affairs. Anyway, IHT is not payable on transfers between spouses.

Just bravado based on your own prejudices. The main reason it was done was when wives became responsible for their own tax affairs and a small, but voiciferous, group wanted it. You can assume nothing of how a HMR&C operate. Between spouses they are likely to be more relaxed but it is very different where co-habitung couples are concerned. Pity the poor executor who has to sort out bank statements because the testator was too lazy to keep simple records. It will also add to the stress the bereaved partner has to deal with.

EachPenny

securityguy wrote: »

In my case, that would be literally hundreds of transactions.

Same for me, in each year, and that will also be the case for hundreds of people on this forum.

securityguy wrote: »

Since MSE is full of people saying "I am the executor for my intestate father, I have no records" and the punchline is not "and I was refused probate", we can assume that HMRC take a risk-managed view of this.

Possibly, or maybe people are paying through the nose to get probate, and may not want to shout about it on MSE.

The bottom line is do you want the people you care about seeing your hard earned money vanishing in fees and unnecessary tax? It is bad enough to lose someone you care about, trying to untangle their undocumented financial affairs makes it worse. We all make our own decisions on what we leave behind though.

zagfles

securityguy wrote: »

I know my own tax affairs. I don't know my wife's financial affairs, at all. Were she to die, there would be a fair amount of guesswork.

The main thing to be aware of is what accounts she's got. If you don't know that it'll be slightly difficult getting hold of the money anyway!

If your claim is that any significant proportion of the population have detailed financial records accessible to third parties, I have a bridge to sell you.

What, the one you're living under :rotfl:Sorry couldn't resist.

zagfles

securityguy wrote: »

In my case, that would be literally hundreds of transactions. Every month, a transfer from my sole name account to the joint account, for a start off. Plane tickets. Holidays. Cars. Laptops. All of it paid for from income.

None of that matters. Paid out of income & transfers between spouses, are exempt as far as IHT goes.

It's possible that somewhere there are a small number of goodie-twoshoes who could tell you, six years later, what a particular payment was for. Aren't they good? Since MSE is full of people saying "I am the executor for my intestate father, I have no records" and the punchline is not "and I was refused probate", we can assume that HMRC take a risk-managed view of this. Since the claim that started this is that if I pay for a holiday from a sole name account that might be a gift, the standards of record keeping required would involve knowing who was travelling on a particular plane ticket payment.

I've help deal with probate a couple of times - it wasn't that hard getting the info required. The executor can ask banks for statements from the last 7 years, you can go through these and for most people there'll only be occasional abnormal transactions, and someone is bound to know what they were for.

It'll be a lot harder for people who continually swap accounts, ie MSE behaviour, but most people don't, they have the same bank & savings accounts for decades. We do, which is why I said earlier it would be a nightmare sorting probate for us if we weren't married. But we are, and all large transactions have been between us so there's no issue as far as IHT/probate goes.

EachPenny

zagfles wrote: »

None of that matters. Paid out of income & transfers between spouses, are exempt as far as IHT goes.

Isn't that the issue here though? If there is no documentation then how can you show that lumps of money being moved around are from income, or transfers between spouses - only needing to do so if you are challenged of course.

Mind you, I'm still trying to reconcile these two statements -

securityguy wrote: »

...I don't know my wife's financial affairs, at all....

securityguy wrote: »

...Every month, a transfer from my sole name account to the joint account....

How is it possible to have a joint account with someone, but have no knowledge of their financial affairs... not even their tax situation?