How do HMRC calculate how much IHT needs to be paid before Probate/Grant of Administration issued?

ZingyOcean

Hi There, 

As above really - a quick question ask if anyone knows how HMRC will calculate what portion of IHT needs paying before the grant is issued, and what can be paid after. 

We've just posted all the IHT docs today, for an intestate estate made up of the following:

2x Properties totalling £445,000
Bank Accounts & Investments totalling £785k (mostly in investments - and unsure if we can use the direct payment scheme)

We are also claiming transferrable NRB from a pre-deceased spouse who died in '06.

This means about £230k of IHT will be due on an estate of ~£1.2m. 

Does anyone know what amount of this is likely to need to be paid up front before the grant can be issued? Only about £75k is in Bank/Building Society accounts that would support the IHT Direct Payment Scheme using IHT423, so there is a chance that anything else will be inaccessible until after. 

Thanks. 

xylophone

https://www.gov.uk/paying-inheritance-tax/yearly-instalments

may help.

Keep_pedalling

What about the transferable residential nil rate band? Presuming one of those properties was a family home, or the family home was sold because it was no longer suitable for him, then that also should be claimable, and could reduce the IHT bill to nearer £80k. 

ZingyOcean

Keep_pedalling said:

What about the transferable residential nil rate band? Presuming one of those properties was a family home, or the family home was sold because it was no longer suitable then that also should be claimable, and could reduce the IHT bill to nearer £80k. 

Thanks for the thought but alas not. The deceased had no children and under intestacy rules the properties will be split between nieces and nephews - and from what I understand RNRB doesn't apply here. 

ZingyOcean

*estate will be split I should say. 

Keep_pedalling

ZingyOcean said:

Keep_pedalling said:

What about the transferable residential nil rate band? Presuming one of those properties was a family home, or the family home was sold because it was no longer suitable then that also should be claimable, and could reduce the IHT bill to nearer £80k. 

Thanks for the thought but alas not. The deceased had no children and under intestacy rules the properties will be split between nieces and nephews - and from what I understand RNRB doesn't apply here. 

Of cause, I just looked at your other thread and realised my mistake,

ZingyOcean

So assuming that the property IHT can be split into instalments under "things that take time to sell" - what is the calculation for what HMRC will use to work out what is required up front? 

Property makes up 37% of the estate so would they ask for 63% of the IHT liability i.e. about £145k up front, with the remainder eligible for delayed payment? Or is it calculated differently?

xylophone

Give HMRC a ring?

https://www.gov.uk/government/organisations/hm-revenue-customs/contact/probate-and-inheritance-tax-enquiries