DIY Probate Queries

Marsie

I wonder if someone could assist with some queries around probate?

My mother in law died last year, and we need to get probate kicked off, but we are first timers and a tad confused, particularly around valuation of the estate for inheritance tax.

House valuation of '£375,000-£385,000' and an outstanding equity release bill leaves us a bit confused on whether we can take the lower figure and just tip under the inheritance tax bill, or whether HMRC would take the higher figure as more valid.

Many thanks!

Yorkshireman99

Marsie wrote: »

I wonder if someone could assist with some queries around probate?

My mother in law died last year, and we need to get probate kicked off, but we are first timers and a tad confused, particularly around valuation of the estate for inheritance tax.

House valuation of '£375,000-£385,000' and an outstanding equity release bill leaves us a bit confused on whether we can take the lower figure and just tip under the inheritance tax bill, or whether HMRC would take the higher figure as more valid.

Many thanks!

You need to get a paid for professional valuation by a RICS or similar. Howevr the equity release bill is a debt of the estate so it should reduce the value below the IHT threshold. In any case is your FIL still alive? If not then there may well be enough of his allowances to tranfer.

Marsie

No, FIL died a couple of years back (they were separated, but not divorced) - no claims against any inheritance tax were made through his estate at all, he didn't have any assets to speak of - so there is additional confusion over whether there is a further inheritance tax allowance here?

Marsie

TMRA is the additional £100k we are looking at, I have just found - but the info online at HMRC is befuddling to me.

Margot123

I think you may find that the equity release company will have the final say in what they consider an acceptable value/sale price for the property.
Have you called them yet to discuss their position as they have equitable interest in the property?

You may also have found that they hold the deeds to the property. When someone I know passed away, the family had a struggle to locate the deeds. Their solicitor suggested the equity company and low-and-behold, they had them. They wouldn't release them though till the outstanding bill was paid (amounting to around £75k on a 13 year £20k loan!!!!!).

Keep_pedalling

Marsie wrote: »

No, FIL died a couple of years back (they were separated, but not divorced) - no claims against any inheritance tax were made through his estate at all, he didn't have any assets to speak of - so there is additional confusion over whether there is a further inheritance tax allowance here?

Sounds like almost his entire nil rate band can be transferred, and his primary residence NRB as well, so your MILs estate should be way under IHT territory.

Keep_pedalling

Margot123 wrote: »

I think you may find that the equity release company will have the final say in what they consider an acceptable value/sale price for the property.
Have you called them yet to discuss their position as they have equitable interest in the property?

You may also have found that they hold the deeds to the property. When someone I know passed away, the family had a struggle to locate the deeds. Their solicitor suggested the equity company and low-and-behold, they had them. They wouldn't release them though till the outstanding bill was paid (amounting to around £75k on a 13 year £20k loan!!!!!).

They will only be concerned about getting their money back, maximizing the remaining equity is down to the executors.

Marsie

We have the deeds, presumably because the equity release is a small portion of property value?

So, we think we are getting in to filling in:

- PA1 probate application form
- IHT205 for inheritance tax under limit
- IHT217 for transfer of nil rate band.

If this looks off to anyone, would appreciate a steer.

Many thanks for assistance so far.

M.

Keep_pedalling

Marsie wrote: »

We have the deeds, presumably because the equity release is a small portion of property value?

So, we think we are getting in to filling in:

- PA1 probate application form
- IHT205 for inheritance tax under limit
- IHT217 for transfer of nil rate band.

If this looks off to anyone, would appreciate a steer.

Many thanks for assistance so far.

M.

ER could be more than you think especially if it was taken out a good few years ago because compound interest would have inflated the original loan considerably.

Have you had any communications with the ER company yet.

Marsie

Yes, we have been in contact with ER company and have the appropriate paperwork to confirm amount and date to be paid by.

Margot123

Keep_pedalling wrote: »

ER could be more than you think especially if it was taken out a good few years ago because compound interest would have inflated the original loan considerably.

Quite frightening how the interest snowballs, as per my post above.