PETs - IHT403

MumOf2

Tom99 wrote: »

I think the 1st of the 10 installments will be due on 29th Feb (end of 6th month) not 31st Mar 2020 and interest would only be due from that date.

If you elect for installments you only pay the IHT due on cash/shares now in order to obtain probate, then with tax due on the house in 10 installments. The total IHT bill is apportioned over all the taxable assets to work out how much you can defer on the house.
Re gifts from income it seems you might be trying to carry over surplus income for more than two year which, whilst not ruled out completely, you may well be asked to show evidence this accumulated income had not become capital.

Thanks for this invaluable info in re instalments and what will be due on which part of the estate. I didn't realise it was only due on cash/shares in order to obtain probate which is excellent news.

You're quite right about the deadline of end Feb, not March! Thank you.

I've been through all entries for the past 7 and a bit years and it doesn't look too bad from the PET perspective. Carrying over from one year to the next deals with some of it; it's just the last year when we're relying on carrying forward two years but we're quite sanguine about not being allowed exemptions on transfers for that year.

Bless mum, she made sure we benefitted as much as possible over all these years.

MumOf2 x

MumOf2

badger09 wrote: »

So sorry to hear of your loss.

I've been following your thread, can't offer any advice on your IHT issues, but didn't want to read and run.

I can identify with your inability to sleep, and spent many useful hours in the middle of the night, writing letters & drawing up lists when I was executor for my sister last year. It's something to focus on and feels so much better than just lying in bed churning things over.

Please give yourself time, and permission to grieve though. Even when its expected, death of a loved one is still a shock to the system, as you already know. Look after yourself.

Thanks for your wise words, Badger. It was sort of expected because of mum's advanced years (90), but the end came suddenly and unexpectedly. It was all pretty traumatic as I drove 5 hours in the middle of the night to get here but just missed by 5 minutes because of road closures on the way. What a dreadful night it was for all of us.

MumOf2
x

Tom99

MumOf2 wrote: »

Thanks for this invaluable info in re instalments and what will be due on which part of the estate. I didn't realise it was only due on cash/shares in order to obtain probate which is excellent news.

You're quite right about the deadline of end Feb, not March! Thank you.

I've been through all entries for the past 7 and a bit years and it doesn't look too bad from the PET perspective. Carrying over from one year to the next deals with some of it; it's just the last year when we're relying on carrying forward two years but we're quite sanguine about not being allowed exemptions on transfers for that year.

Bless mum, she made sure we benefitted as much as possible over all these years.

MumOf2 x

Use IHT400 Calculation to work out what tax is due now (ie the amount you normally pay at the same time as the probate application) and the amount that can be paid by installments:
https://www.gov.uk/government/publications/inheritance-tax-inheritance-tax-account-iht400

When the time comes, use the IHT Interest Calculator to work out the amount of interest you will have to send with each payment made after 1st March 2000.
The full IHT balance is due when the house is sold you cannot continue to pay by installments once the asset is sold.
http://www.hmrc.gov.uk/tools/inheritancetax/interest-rate-calculator.htm
The interest rate charged at the moment is 3.25%pa and if you have overpaid interest will be paid back to you at 0.5%pa.

badger09

MumOf2 wrote: »

Thanks for your wise words, Badger. It was sort of expected because of mum's advanced years (90), but the end came suddenly and unexpectedly. It was all pretty traumatic as I drove 5 hours in the middle of the night to get here but just missed by 5 minutes because of road closures on the way. What a dreadful night it was for all of us.

MumOf2
x

Sort of similar circumstances here. My sister was 80 and had undergone back surgery which had gone well. I was supposed to be travelling (200 miles) to look after her after discharge so hadn't visited hospital. She suddenly deteriorated overnight & I was unable to travel due to road & rail closures (early March 2018) and my niece (also 200 miles but different direction) arrived very shortly after she died. Not entirely unexpected, but we were both devastated we couldn't be with her. It gave me some comfort to carry out her last wishes.

Look after yourself.

MumOf2

Thanks, Tom and Badger.

MumOf2
x