Deceased P/Exchanged car for one in my name before death - how to add to IHT400

naedanger

Ali71 said:

 naedanger said:

Ali71 said:

Although I'm still not sure what to put on IHT404 as the contribution by each joint owner shown at fractions, and how that might affect anything. 

If you put down that your contribution was zero then HMRC might start thinking the ownership was in reality 100% your father's (since you would be saying he contributed everything) or they might think your ownership has arisen as a result of a gift with reservation of benefit from your father and they would then want to see that gift included in the IHT forms. Both these views would be wrong but could cause unnecessary questioning and delay from HMRC while they establish the true position i.e. your mother (very reasonably as spouse) contributed to half the ownership and you inherited that half from her - so it is fully correct to say your father's estate share is only half the property's value.

I think you are over worrying. It sounds like the estate's value is c. £420k and the IHT threshold for the estate is at least £500,000. So the estate is not in danger of paying IHT and HMRC are not going to spend much time on your forms. They will also only query things that they think are significant i.e. that might mean you have so underestimated the estate that it should be liable to IHT. So if you put the car down as an asset of the estate, or as a gift, or as a gift with reservation it is not going to make any signficant difference and HMRC is not going to query it - even if they think it should have been shown differently they will understand the forms were filled out with reasonable care. (It might be different if you didn't mention the car at all and they found out about it, since they then might think you had deliberately concealed an asset. But even then they might consider an honest mistake the most likely reason.)

Bless you for that.

I can feel my blood pressure falling. Nothing I can do about my ruched under eye bags but hey ho. And the funeral's on Tuesday. So I think I will take note of your words of wisdom and start copying all the statements and bits that I need to attach to this thing and get it in the post. Not going to try to do any of this online - don't have enough paracetamol for that. Next stop, PA1P but will give it a couple of weeks before I send that off.


Many thanks for your help. 

Obviously keep a copy of all the information but also pay for "recorded" or "signed for" delivery. HMRC do not acknowledge receipt, and when I sent forms in, a few months ago, it took HMRC about a month before they could tell me, when I called, whether they had even received my forms. This is because it can take a month for them to scan the forms onto their system. (Had I sent the forms signed for I could have found out sooner that they had at least reached them. And if they had lost the forms I would have had evidence that is what happened and they would presumably have expedited matters had I needed to resubmit everything due to their failure.)

On the positive side, they completed their work almost immediately after they acknowledge they had the forms.

PS It took me months to gather all the information I needed from banks etc before I was able to complete the forms so you seem to be making very fast progress.

Ali71

Well, his bank was brilliant, they actually paid me his balance with in about a week and a half of them getting the death certificate! I had the phone, utilities sorted in about a week, took about a month for a couple of other statements to come through, luckily a couple of houses in the same street have gone on (and sold) very recently so I am using the details from Rightmove to back up my property value. I find this quite stressful, so the way to tackle that for me is to launch myself at it and get it sorted. 

The worst bit now, as you mentioned above, will be the waiting around while you don't know what they are doing with all your precious paperwork.  

Yes I am photographing all the paperwork and keeping it on file and I'll definitely be using signed for when it goes. So it's taken about six weeks to get here, although it feels a lot longer!! There's still a couple of bits to do but I can't do them till I get the (fingers crossed) probate. 

It's a wait and see scenario now.

Thanks a lot for your help.   

naedanger

Ali71 said:

 naedanger said:

Ali71 said:

Although I'm still not sure what to put on IHT404 as the contribution by each joint owner shown at fractions, and how that might affect anything. 

If you put down that your contribution was zero then HMRC might start thinking the ownership was in reality 100% your father's (since you would be saying he contributed everything) or they might think your ownership has arisen as a result of a gift with reservation of benefit from your father and they would then want to see that gift included in the IHT forms. Both these views would be wrong but could cause unnecessary questioning and delay from HMRC while they establish the true position i.e. your mother (very reasonably as spouse) contributed to half the ownership and you inherited that half from her - so it is fully correct to say your father's estate share is only half the property's value.

I think you are over worrying. It sounds like the estate's value is c. £420k and the IHT threshold for the estate is at least £500,000. So the estate is not in danger of paying IHT and HMRC are not going to spend much time on your forms. They will also only query things that they think are significant i.e. that might mean you have so underestimated the estate that it should be liable to IHT. So if you put the car down as an asset of the estate, or as a gift, or as a gift with reservation it is not going to make any signficant difference and HMRC is not going to query it - even if they think it should have been shown differently they will understand the forms were filled out with reasonable care. (It might be different if you didn't mention the car at all and they found out about it, since they then might think you had deliberately concealed an asset. But even then they might consider an honest mistake the most likely reason.)

Bless you for that.

I can feel my blood pressure falling. Nothing I can do about my ruched under eye bags but hey ho. And the funeral's on Tuesday. So I think I will take note of your words of wisdom and start copying all the statements and bits that I need to attach to this thing and get it in the post. Not going to try to do any of this online - don't have enough paracetamol for that. Next stop, PA1P but will give it a couple of weeks before I send that off.


Many thanks for your help. 

I hope it all goes smoothly for you. (The estates I have been executor for have been in Scotland, so while I had to complete an IHT400 form and schedules, I am not familiar with probate because in Scotland there in a different process - called "confirmation".)