Using money from probate for deposit

Megancomping

Hi, 
 I am due to inherit some money from a will which I plan to use as a deposit, the probate process has only just started so it’s likely to be some time yet before the money is readily available. I have three questions: 
- at what point in the buying process does the deposit need to be readily available as it’s going through probate but I’m keen to find somewhere as soon as possible? 

- what proof will I need for the solicitor to prove where the money came from? I can only find information online about evidence for gifted deposits where the donor is still alive and has to fill a form out which obviously can’t happen in my case? 

-what are the rules around inheritance tax- in terms of what’s the threshold for this and potential payment rates? 

Thanks 

macman

The deposit will be needed shortly before the point at which you exchange contracts.
You don't pay IHT: the estate does.

davidmcn

Evidence of funds will be from the executors - not going to be a problem. More of a problem would be if you wanted to start putting in offers before you've actually got the money, as people may be sceptical about how long the probate process will take.

Inheritance tax is on the whole estate and is for the executors to worry about - or are you the executor too?

GN2020

I can help slightly with the proof of deposit. 

I received some inheritance this year, I gave a copy of the solicitors letter dealing with the sale of my dads house which also showed how much was owed to us and my bank statement showing the money going into my account and who it was from. 

I hope that helps even a little bit and I’m very sorry for your loss. 

Slithery

You need to have the deposit funds available before exchanging contracts. Bear in mind that depending on the complexity of the estate getting probate may be a very long process.

dimbo61

With the second lockdown and the huge number of house sales being rushed through due to the stamp duty holiday many solicitors are taking weeks and weeks to sort house sales and probate enquiries.

frogglet

We weren't asked for proof of the source of our deposit earlier this year. We sent a pound to check the account then transferred the rest.

davidmcn

frogglet said:

We weren't asked for proof of the source of our deposit earlier this year.

Rather worrying. What else didn't your solicitor bother doing?

lookstraightahead

Probate can take ages and ages. Spend the time getting your finances in order and I wouldn't even be looking yet

fwor

lookstraightahead said:

Probate can take ages and ages.

Agreed - our probate application last year - pre-Covid - took 3 months, and there was nothing complicated about it. I would expect longer than that in the current circumstances.

FreeBear

Granting of probate can be fairly quick, or it could take an age. Depending on the complexity of the estate and any involvement of HMRC (for inheritance tax), releasing of funds could be a year, or it could be five. If there are any disputes, it could take even longer. But a simple estate without any challenges, a typical time frame would be 12-18 months to wrap everything up.