IHT questions.

YoungBlueEyes

I think this might be a dumb question but anyway...

Do inheritance tax forms always have to be filled in after someone dies?

I rang the taxman after daddy died, and I'm sure he said I didn't have to do anything because the estate was well under £325k and didn't include any property. Have I remembered that wrongly?

I'm having a little panic now, have I made a mistake? How long do you have to file these forms? Have I realised too late? What are the penalties??

I'll ring them again in the morning, and I'm heading for the gov website now.

Keep_pedalling

Do not worry, you only have to fill in IHT forms if you have to apply for probate. You only need apply for that if there is property involved or the estate holds assets in in institution that will not release them without probate.

Even if you did need to apply for probate late in the day, the only penalties HMRC apply are for late payment of inheritance tax, which does not apply to your fathers estate.

YoungBlueEyes

Thanks Keep pedalling. Phew! I'm rheading the notes for IHT205 but it really isn't helpful.

We have probate, it was granted Jan 15th. That was to put a 6 month time limit on claims though.

Does having probate make a difference?

Keep_pedalling

YoungBlueEyes wrote: »

Thanks Keep pedalling. Phew! I'm rheading the notes for IHT205 but it really isn't helpful.

We have probate, it was granted Jan 15th. That was to put a 6 month time limit on claims though.

Does having probate make a difference?

Now I am confused, if you have probate then you will have had to fill in form PA1, the probate application form, which has to be done in conjunction with the appropriate IHT form, IHT 205 in this case.

Granting of probate does not give you protection of claims either, so could you clarify exactly what forms or processes you have actually done up to now?

YoungBlueEyes

I haven't filled in any forms at all.

I rang the taxman who (I think) said as it was under the £325k I didn't have to do anything. Our family solic said we should apply for probate because once it's granted there is a 6 month time limit for anyone to make a claim/contest the will etc, so we did.

A couple of people have asked if we have probate (EA's, contentious will solic) but no-ones mentioned IHT. I'm only thinking about it again because of another comment on here I replied to (this is your fault AnotherJoe ha haa!).

Quick round up for new readers - daddy died 11th nov. Probate granted 15th Jan (to put a time limit on 'unhappy family members' claims, shall we say). Estate was a bank account of just over £7k, house transfered to me and sis in 2014 so not part of estate.

Tom99

[FONT=Verdana, sans-serif]If you have probate you must have completed at least one IHT from probably ITH205 so I don't understand why you have not.

[/FONT] [FONT=Verdana, sans-serif]Then you say you have not filled in any forms, so you can't possibly have received probate on 15th Jan.

[/FONT] [FONT=Verdana, sans-serif]Maybe your solicitor has published a notice of the death for claims to come forward and that is what you think is probate. With an estate on death of £7k you may not need probate at all.

[/FONT] [FONT=Verdana, sans-serif]Re the house, if you farther gifted this to you in 2014 but continued to live there that will be a gift with reservation and the full value of the house will be included in his estate, would that take the estate over £325k?
.[/FONT]
[FONT=Verdana, sans-serif]If your father did not live in the house because it is less than 7 years ago it will again still form part of his estate.

[/FONT] [FONT=Verdana, sans-serif]Depending on the house value you may end up paying some IHT, you will also be liable to CGT on your share since you acquired in in 2014 at its then market value.[/FONT]

Flugelhorn

just doing probate application (oath arrived yesterday) so aware that you definitely cannot proceed with the application if you haven't done IHT forms either online and included the reference in PA1 or on paper etc etc.

Gifting houses definitely makes it complex - maybe the OPs solicitor completed the forms ?

Tom99

Flugelhorn wrote: »

Gifting houses definitely makes it complex - maybe the OPs solicitor completed the forms ?

[FONT=Verdana, sans-serif]That's true but unless the solicitor is also the executor the OP will have had to sign the forms.[/FONT]
[FONT=Verdana, sans-serif]Since its the 'family solicitor' maybe they were made executor.[/FONT]

Keep_pedalling

Tom99 wrote: »

[FONT=Verdana, sans-serif]If you have probate you must have completed at least one IHT from probably ITH205 so I don't understand why you have not.

[/FONT] [FONT=Verdana, sans-serif]Then you say you have not filled in any forms, so you can't possibly have received probate on 15th Jan.

[/FONT] [FONT=Verdana, sans-serif]Maybe your solicitor has published a notice of the death for claims to come forward and that is what you think is probate. With an estate on death of £7k you may not need probate at all.

[/FONT] [FONT=Verdana, sans-serif]Re the house, if you farther gifted this to you in 2014 but continued to live there that will be a gift with reservation and the full value of the house will be included in his estate, would that take the estate over £325k?
.[/FONT]
[FONT=Verdana, sans-serif]If your father did not live in the house because it is less than 7 years ago it will again still form part of his estate.

[/FONT] [FONT=Verdana, sans-serif]Depending on the house value you may end up paying some IHT, you will also be liable to CGT on your share since you acquired in in 2014 at its then market value.[/FONT]

Sounds like the solisitor did all the paperwork. As you say for IHT purposes the house forms part of the estate, The OP should have this documented on the final estate accounts provided by the solisitor.

The OP and her sister may have a CGT issue when they come to sell the house though.

AnotherJoe

YoungBlueEyes wrote: »

Thanks Keep pedalling. Phew! I'm rheading the notes for IHT205 but it really isn't helpful.

We have probate, it was granted Jan 15th. That was to put a 6 month time limit on claims though.

Does having probate make a difference?

As per everyone else, if you have probate, then someone filled the form in.

Your dads solicitor? Did you use a solicitor?

YoungBlueEyes

Yep it was all done through our solicitor. We applied for probate on his recommendation. Me and sis went in to swear oathes, paid £12, and a few weeks later we got a letter that it was granted and a copy of it. There were no forms.
Me and sis are executrices. Dad transferred the house to us and still lived in it. Sis moved back from London a couple of years ago so it was the 3 of us living here when dad died.

The house is worth maybe £150k ish.