IHT query

Haf2001

I’m trying to work out what my Mother’s IHT allowance is and am getting very confused.

My father died 4 years ago, my Mother was the sole beneficiary, everything was in joint names and I don’t believe that Grant of Probate was required or sought.

The estate at the time of my Dad’s death consisted of a very dilapidated farm house and another house (converted farm buildings) close by with a relatively small sum of savings. My Mother has renovated the house which is now a holiday let and we both live in the smaller house.

I am my Mother’s sole beneficiary and executor. She has terminal cancer and is getting very worried that I will have to sell up in order to pay IHT.

Is it correct that my Dad’s allowance passed to her and that she now has an allowance of £650,000?

Many thanks

Keep_pedalling

Haf2001 wrote: »

I’m trying to work out what my Mother’s IHT allowance is and am getting very confused.

My father died 4 years ago, my Mother was the sole beneficiary, everything was in joint names and I don’t believe that Grant of Probate was required or sought.

The estate at the time of my Dad’s death consisted of a very dilapidated farm house and another house (converted farm buildings) close by with a relatively small sum of savings. My Mother has renovated the house which is now a holiday let and we both live in the smaller house.

I am my Mother’s sole beneficiary and executor. She has terminal cancer and is getting very worried that I will have to sell up in order to pay IHT.

Is it correct that my Dad’s allowance passed to her and that she now has an allowance of £650,000?

Many thanks

Not quite, her estate also has a primary residence nil rate band that will apply to it which is doubled up as your father’s PR nil rate band is also transferable, so that means anything under £850,000 is tax free. If she survives beyond the 5th April that will rise to £900,000.

https://www.gov.uk/government/publications/inheritance-tax-main-residence-nil-rate-band-and-the-existing-nil-rate-band/inheritance-tax-main-residence-nil-rate-band-and-the-existing-nil-rate-band

noh

Yes her estate now has a IHT free allowance of £650000 plus, if the house she lives in is left to you, a potential further £200000 this tax year or £250000 next year. This extra allowance is the residence nil rate band and applies if the main residence is left to a direct descendant see:

https://www.gov.uk/guidance/inheritance-tax-residence-nil-rate-band

Haf2001

Many thanks both. Do you happen to know if the lack of Grant of Probate from my Dad will be an issue? Also, we have no deeds to the property. My parents’ solicitor was jailed and stuck off before my Fathers’s death. We were able to recover their wills from the “naughty solicitor” archive but there was no trace of any other documents. However, the house has been in my Fathers family for about 200 years and I have documentary evidence of that (but not deeds).

Yorkshireman99

Haf2001 wrote: »

Many thanks both. Do you happen to know if the lack of Grant of Probate from my Dad will be an issue? Also, we have no deeds to the property. My parents’ solicitor was jailed and stuck off before my Fathers’s death. We were able to recover their wills from the “naughty solicitor” archive but there was no trace of any other documents. However, the house has been in my Fathers family for about 200 years and I have documentary evidence of that (but not deeds).

You need a professional to register the property. You also need to get the wills checked out to make there are no pitfalls.

Keep_pedalling

Haf2001 wrote: »

Many thanks both. Do you happen to know if the lack of Grant of Probate from my Dad will be an issue? Also, we have no deeds to the property. My parents’ solicitor was jailed and stuck off before my Fathers’s death. We were able to recover their wills from the “naughty solicitor” archive but there was no trace of any other documents. However, the house has been in my Fathers family for about 200 years and I have documentary evidence of that (but not deeds).

That should be resolvable. Have you checked the land registry?

Is this still a working farm?

Haf2001

I’ve checked Land Registry and they have no information about the property.

It’s no longer a working farm, most of the land was sold in the early 90’s with about 5 acres immediately around the house kept.

Yorkshireman99

Haf2001 wrote: »

I’ve checked Land Registry and they have no information about the property.

It’s no longer a working farm, most of the land was sold in the early 90’s with about 5 acres immediately around the house kept.

See post #5 above.

eddyinfreehold

It is worth pointing out that your mother and father must have been married for the IHT allowance to be 'doubled' ....

As others have said, you and your mother MUST go and see a solicitor and check whether the land was registered when the land sale took place. If not I would get it correctly registered now or as soon as you possibly can.

Also I would suggest that your mother and yourself write wills if you haven't already. They only need to be simple but they avoid any confusion and will be right up to date, especially as the land may not be registered and the deeds missing.