Bank statements, Solicitors and IHT

sparkiemalarkie

So, have I got this right?


The RNRB is applied to the estate first and then the nil rate band (currently £325,000 or in mums case £650,000) is applied.

if , for example mum leaves her entire estate consisting of a property worth £500,000 and savings totalling £160,000 the total estate equals £660,000
from that the RNRB of £200,000* can be deducted first, leaving £460,000 which is covered by the nil rate band so there would be no inheritance tax to pay.


*double the allowance as it includes dads RNRB


Am I close to understanding this?


sparkie

Keep_pedalling

That is correct.

getmore4less

I have had a look through her paper work and can only find statements dating back to Jan 2012 so there are a couple of years missing.

Executors(especially Solicitors) by default don't go sifting through years of paper work.

The starting point is an inventory of assets and their value at DOD.

Relatives are usually asked if there are records of gifts or any that are known that will become failed PETS.

they may ask or do themselves a rough look for any massive change in asset base suggesting there have been some giveaways.

eg they downsized in the last 7 years and the current assets don't reflect the money released.

There will be a level of due diligence that may require a more detailed look.

The issue is cost as it is not practical to analyse every transaction across multiple accounts.

The taxable total is then looked at with the nil rate bands to see where the IHT lies at that point a more detailed look at the may may happen.

the transferable NTB is checked against the previous estate to see what % is to be used, you can only assume 100% if everything went to spouse and there were no failed PETS(gift).

AnotherJoe

Now you understand it, all that will happen is that the solicitor will ask you all these questions, take that info and transfer it into the forms for you, adding no value.

Have a look at the forms (just two) yourself and you'll almost certainly decide you can do it yourself, and save thousands of pounds. Plus a substantial amount of time.

Keep_pedalling

AnotherJoe wrote: »

Now you understand it, all that will happen is that the solicitor will ask you all these questions, take that info and transfer it into the forms for you, adding no value.

Have a look at the forms (just two) yourself and you'll almost certainly decide you can do it yourself, and save thousands of pounds. Plus a substantial amount of time.

Although I agree 100% it will be more than 2 forms in this case. Apart from PA1 and IHT400, IHT402, 403, 405, 406, 435 and possibly a few more suplementary firms depending on the assets owned.

None of these are particularly tricky to fill in, but you only get away with 2 forms if IHT 205 can be used rather than IHT400

AnotherJoe

Thanks for the correction KP, fair enough.

My general point stands is that everything the solicitor puts in the forms is ultimately provided by you, so as long as you follow the process, which my experience is well set out on the relevant government websites, there's nothing the solicitor adds to what you do anyway. You need to gather all the detail and check its right and that is the bulk of the work.

There is also the fall back option of Which who for £400 provide essentially a solictor at the end of a phone to help you navigate the forms, should you have some particular questions about specific entries or forms. No experience with it myself but looked into it before realising that with my mums simple estate it wasn't necessary.

sparkiemalarkie

AnotherJoe wrote: »

Now you understand it, all that will happen is that the solicitor will ask you all these questions, take that info and transfer it into the forms for you, adding no value.

Have a look at the forms (just two) yourself and you'll almost certainly decide you can do it yourself, and save thousands of pounds. Plus a substantial amount of time.

Thanks
I am not an executor.
The 2 executors, due to health reasons, are not able to carry out their duty.
I was not included in the decision making but would like to gain as much information as possible.


(:rotfl: there was a long rant here but I decided to delete it)


sparkie

Keep_pedalling

Sounds like she appointed people of her own generation as executors, which is often a mistake especially if you have children.

sparkiemalarkie

Keep_pedalling wrote: »

Sounds like she appointed people of her own generation as executors, which is often a mistake especially if you have children.

I think it was a mistake not to have appointed all the children as executors as the two children that were appointed are both unwell.
The will was written a very long time ago and unfortunately Mum refused to add the other 2 as executors at a later date.


Unfortunately this is where we are.


sparkie

nom_de_plume

If the appointed Executors are not up to doing the job they can relinquish their roles and let you take charge if they and you are in agreement to do so.

Picking up on a point mentioned above, did your Father leave everything to your Mum in his Will or were there any other beneficiaries? If the latter, this will likely affect his transferable nil rate band.