need help with long running estate

LibrisLycan

I’m the only beneficiary and administrator of my Parents estate. Mum died nearly 4 years ago, Dad nearly 6 years ago. Probate’s not complete, there’s more about that at the end, I wouldn’t mind any general advice, but I need to know a few urgent things.




1. Some of my Mum's bank accounts were closed, they paid some interest and had tax deducted. Do I need to fill out the “trusts, etc.” pages on a tax return now, or does that wait until after probate?


2. Can the house be sold at auction now, before probate is complete? And if it’s sold at auction will HMRC accept the value at auction, and if so is there a 4 year time limit on that? (I think I might be thinking of household goods for the 4 year limit). It was and still is very neglected, and I don't believe anywhere near the value as if were normal.



3. just read something about doing tax returns on estates if they go over a year, so I need to do late yearly tax returns for this estate now? If so can these be left till after probate is complete? If there’s fines, I don’t think I’ve got the money now?




Background


I’m embarrassed to say I’ve posted here before about this. Yes I know I’ve screwed up, and I believe I’ve missed the nil rate band deadline of 2 years, so there will be lots of IHT to pay now, I had thought there would be little if any to pay up till recently.


My parents were serious hoarders, I’ve been clearing rooms that were full wall to wall and nearly to the ceiling. I’ve sorted through every item of family clothing, all clothes I’ve ever worn back to baby clothes, every fridge, mattress and TV that we ever had and broke has been shoved to one side rather than discarded.
Their paperwork was horrendous, all mixed up with rubbish and stuff in a huge pile in the front room, that’s sorted now.


I’ve had some illness, anemia, got diagnosed a year ago, and I’ve been able to do a lot more since that was sorted out. And I think the grief hit me a bit harder than I realized, now. Plus anxiety issues that I’m working on. It has sometimes been too much for me and I’ve several times buried my head in the sand about this, and avoided it all, but it has been very complex.

Keep_pedalling

No the house cannot be sold without probate, and you will need to obtain a valuation based on the date of death. In your thread from 3 years ago you said the house was in very bad condition, are you sure the estate falls in IHT territory?

You have let a lot of deadlines pass including payment of IHT, I really think you should take some professional advice.

LibrisLycan

Keep_pedalling wrote: »

and you will need to obtain a valuation based on the date of death. In your thread from 3 years ago you said the house was in very bad condition, are you sure the estate falls in IHT territory?

Similar houses in our street were worth about £700k at the time of my Mums death. I'd estimate min £80k needs spending on the house to renovate it ( I know it needs a new roof among other things). I think I'd need to sell it at auction, I fear it could go for a lot less, why I was wondering if HMRC would take that into account.

Keep_pedalling

LibrisLycan wrote: »

Similar houses in our street were worth about £700k at the time of my Mums death. I'd estimate min £80k needs spending on the house to renovate it ( I know it needs a new roof among other things). I think I'd need to sell it at auction, I fear it could go for a lot less, why I was wondering if HMRC would take that into account.

For IHT purposes they are only interested in the value at the date of death. If the value has gone up since then they will also be interested in any capital gains you have achieved. Any IHT due should have been paid within 6 months, but its not clear if any was due then as £650k should have been exempt. I know that certain forms have to be used within 2 years to transfer your fathers nil rate band, but I don't think that means it can no longer be claimed, but this is why you need professional help.

I know its going to be expensive but in this case I think you should hand the whole job over to a solicitor.

eddyinfreehold

need help with long running estate
I’m the only beneficiary and administrator of my Parents estate. Mum died nearly 4 years ago, Dad nearly 6 years ago. Probate’s not complete, there’s more about that at the end, I wouldn’t mind any general advice.....

LibrisLycan ... my sympathies for the position you find yourself in. Do not be worried, plenty of people are similarly overwhelmed in these circumstances and you are not on your own. The advice above is correct. You need professional help. It will cost, but in the long run it will save you an enormous amount of time, stress and heartache if you follow the professionals advice. Your parents haven't helped by leaving everything in a mess but that is now history and you must not blame them. There is a whole generation of very secretive people unwilling to discuss their financial position with their children for whatever reason. It seems to be a peculiarly British thing. Let's move on to your position...

Can you gather together all the wills you know of from both your mother and father?

Then all their bank, building society, NI&S accounts, Funds, Shares and anything else, every scrap of paperwork, chequebook, statement, card, bill etc that may have an account number on it?

Then all the post that has accumulated related to their money and house dealings since they died.

Put them all in a safe place, cardboard box, briefcase whatever and go and find a very good Inheritance Tax Solicitor. If the house is worth say £500,000 then spending £5-£10,000 on a solicitor will make it all worthwhile if the firm is engaged to do all the legwork finding out the circumstances of your parents' estate. In a few months they should be able to put everything together and give you an estimate of all the estate value at the date of death of your Mother which is the important time. I would budget £10,000 for the job but ask the solicitor to provide estimates and do not tell him what you are willing to pay.

In the short term have you checked 3 things....

Is the property correctly insured for buildings and contents?

Are all the services (elecricity, gas, water, telephone etc) up to date without arrears?

Is the local authority aware that the property is unoccupied and the estate is still in administration?

Plenty of people are overwhelmed in these circumstances. Sometimes it is better to bite the bullet and pay to have someone do everything for you if you are overwhelmed, grieving or uncertain. Going to Welfare Rights or the Citizens Advice Bureau and asking if they can recommend a sympathetic solicitor may be a good route. Both WR and CAB deal with all kinds of financial issues and legal people all the time.

Good luck to you ... report back if you can ...

LibrisLycan

eddyinfreehold wrote: »

Then all their bank, building society, NI&S accounts, Funds, Shares and anything else, every scrap of paperwork, chequebook, statement, card, bill etc that may have an account number on it?

Then all the post that has accumulated related to their money and house dealings since they died.

Put them all in a safe place, cardboard box, briefcase whatever and go and find a very good Inheritance Tax Solicitor. If the house is worth say £500,000 then spending £5-£10,000 on a solicitor will make it all worthwhile if the firm is engaged to do all the legwork finding out the circumstances of your parents' estate. In a few months they should be able to put everything together and give you an estimate of all the estate value at the date of death of your Mother which is the important time. I would budget £10,000 for the job but ask the solicitor to provide estimates and do not tell him what you are willing to pay.

I think I have all the values for stuff like bank accounts and investments, it did take a long time to organize it, but I think it's mostly done.

Would solicitors just do the final paperwork, to check over for stuff like the nil rate band, and tax returns. I only found out about possibly having to do tax returns for the estate today, and I was already confused over the trusts etc pages.

I had been fairly determined up till today to complete it myself as I've done so much already..:(

My Dads unit trusts, for instance. Initially it looked like there were about 20 - 30 as I was finding letters going back years for lots of different companies, but it turns out most of them have been bought out multiple times and there were only 8 in the end, and I wrote off and got all their values already.


There's no wills, I've been living in the house and paying bills.

LibrisLycan

I should add, I normally do my own (very simple) tax return every year, but online.

eddyinfreehold

If there are no wills then you will definitely require the assistance of a solicitor. You have done excellent work so far collecting up all the papers related to their estates. If it is too much for you then you need to have a solicitor fill in all the forms to submit to HMRC so you know what all yout IHT liability is. If you do it yourself it will cost you thousands more than the cost of a professional doing it for you. With no wills you may be in a position to prove a family tree that you are the only beneficiary. Without wills you are not the executor.

Tom99

[FONT=Tahoma, sans-serif]I found this reference on PruAdvisor. I don't know if there is anyway you could use this let out of the 24 mth rule.

[/FONT] “[FONT=Tahoma, sans-serif]Where the personal representatives do not make a claim to transfer unused NRB perhaps because there is no need to take out a grant, any other person liable for tax on the survivor's death, for example, the trustees of a settlement or the donee of a gift, may make a claim, but only when the initial period for claim by the personal representatives has passed. “

[/FONT] [FONT=Tahoma, sans-serif]http://www.pruadviser.co.uk/content/knowledge/technical-centre/transferable_nil_rate_band/#[/FONT]