Applying for Confirmation in Scotland

naedanger

aemcl said:

Sorry I didn’t answer a question on why I had to do IHT 400 etc. I started doing the C1 & C5 only but when I got to the question about a personal pension it said stop & fill in an IHT 400. Then I rang HMRC for advice and was told the same. I now believe the advice was wrong as it wasn’t a personal pension that paid anything on his death or afterwards. 

Also, I checked with Dundee Sheriff Court today about the advice to send the C1 to them while I wait for my second lot of paperwork to be processed.  The girl I spoke to checked with her supervisor and she was incredulous that I had been given that advice.  They say a lot of people are having problems. 

I think you can probably answer "no" to the question on pensions. (I think they relate to an unusual type of pension that could be used to try and help circumvent IHT, and I think you would be aware if that was the case.) But I think you might need to fill in the IHT400 forms anyway, if you are claiming Residence Nil Rate Band. (Not certain since the estate I was dealing with was different.)

aemcl

I’ve gone round the houses on this  subject and as it was classed as “an annuity” I just kept getting the same answer - fill in a full return. I could have done C1, C5 & IHT217 to invoke my mother’s allowance if it hadn’t been for the pension annuity. Once I started filling in the full return I just decided the Residence Nil Rate Band would be easier as it more than covered the over £325 limit. Dad reached 75 between 2006 & 2010 which is apparently crucial and he was paid his annuity for 24 yrs. 

Gers

naedanger said:

aemcl said:

Sorry I didn’t answer a question on why I had to do IHT 400 etc. I started doing the C1 & C5 only but when I got to the question about a personal pension it said stop & fill in an IHT 400. Then I rang HMRC for advice and was told the same. I now believe the advice was wrong as it wasn’t a personal pension that paid anything on his death or afterwards. 

Also, I checked with Dundee Sheriff Court today about the advice to send the C1 to them while I wait for my second lot of paperwork to be processed.  The girl I spoke to checked with her supervisor and she was incredulous that I had been given that advice.  They say a lot of people are having problems. 

I think you can probably answer "no" to the question on pensions. (I think they relate to an unusual type of pension that could be used to try and help circumvent IHT, and I think you would be aware if that was the case.) But I think you might need to fill in the IHT400 forms anyway, if you are claiming Residence Nil Rate Band. (Not certain since the estate I was dealing with was different.)

aemcl said:

I’ve gone round the houses on this  subject and as it was classed as “an annuity” I just kept getting the same answer - fill in a full return. I could have done C1, C5 & IHT217 to invoke my mother’s allowance if it hadn’t been for the pension annuity. Once I started filling in the full return I just decided the Residence Nil Rate Band would be easier as it more than covered the over £325 limit. Dad reached 75 between 2006 & 2010 which is apparently crucial and he was paid his annuity for 24 yrs. 

I got myself stuck on this question too

https://forums.moneysavingexpert.com/discussion/comment/78364012#Comment_78364012

Happily my DM's occupational pension was not relevant.

aemcl

Hi Gers. Yes this was my point of no return and has resulted in many more weeks of sheer frustration. Prudential couldn’t tell me if HMRC were right to advice me to do the full return. I guarantee there is a couple of ticks on the form relating to pensions and I’ve lost house buyers through the wait.   Even when I get to the Scottish court stage I’ll be another month if even if they accept the form first time. The pension didn’t pay out a penny after dad died so really it should have been irrelevant. 

naedanger

aemcl said:

I’ve gone round the houses on this  subject and as it was classed as “an annuity” I just kept getting the same answer - fill in a full return. I could have done C1, C5 & IHT217 to invoke my mother’s allowance if it hadn’t been for the pension annuity. Once I started filling in the full return I just decided the Residence Nil Rate Band would be easier as it more than covered the over £325 limit. Dad reached 75 between 2006 & 2010 which is apparently crucial and he was paid his annuity for 24 yrs. 

An annuity sounds to me like just a conventional pension with nothing alternatively secured about it.

This is what a website (link at end of post) says about an alternatively secured pension:

"an Alternatively Secured Pension, (“ASP”) which allowed pensioners to retain control of their pension funds.   ASPs also had the attraction that on death the deceased’s remaining assets in the pension fund could pass to a spouse or financial dependent free of inheritance tax (IHT)".

Did your father's annuity allow him to retain control of the pension funds? Did it allow him to pass remaining assets to a spouse or financial dependent free of inheritance tax? (I think you can also see from the description why HMRC might be interested in an arrangement that allowed assets to be passed free of IHT.) Plus of course the estate you are talking about sounds like it is miles from paying IHT if all allowances were claimed. So even if it was an alternatively secured pension then I very, very much doubt it would make any difference to the IHT due and so HMRC aren't going to be interested.

If I were you I would assume the pension was not alternatively secured (indeed I made such assumptions for the estates where I was executor).

If you are saying you can claim your late mother's full nil rate band instead of the residence nil rate band then I agree you don't need the IHT400 forms.

https://www.retirementreinvented.com/Articles/59462/Retirement_Reinvented/Managing_Money/Alternatively_Secured_Pensions.aspx

aemcl

Over the last day or so I’ve been thinking of just sending a C1, C5 & an IHT 217 to the Sheriff court like I should have done in the beginning. Worried that I will complicate the issue even further for myself but also thinking that HMRC won’t even notice. Wish I had gone through a solicitor in the first place but they wanted to charge about £11k.  I’m stressing so much about it all now. 

naedanger

aemcl said:

Over the last day or so I’ve been thinking of just sending a C1, C5 & an IHT 217 to the Sheriff court like I should have done in the beginning. Worried that I will complicate the issue even further for myself but also thinking that HMRC won’t even notice. Wish I had gone through a solicitor in the first place but they wanted to charge about £11k.  I’m stressing so much about it all now. 

I think submitting the C1, C5 and IHT217 will be fine, but I might first give the IHT forms another week to turn up or call again and hope to speak to someone better informed than last time. (Also the C5 approach only works if your mother gave everything to your father, so no bequests or gifts to others.)

If you do submit the C1, C5 and IHT217 and your IHT400 forms later turn up they will still conclude you have no tax to pay anyway. If HMRC do decide to query things then your explanation will be fine i.e. you first thought your father had an alternatively secured pension and then realised this was a special type of pension and not what your father had. (Furthermore I bet the majority of executors, excluding professionals, who say the deceased had an alternatively secured pension are mistaken. So this will be a common mistake.)

I paid a solicitor to help with two estates recently. Each time it was £750 plus VAT and costs but that was just to submit the forms to the sheriff court. (For one estate they submitted the C1 and C5, and for the other I submitted IHT400 forms to the tax office and once I had the required code the solicitor submitted the C1 to the sheriff court.) My concern was with the wording on the C1 forms (and I has a slightly unusual situation in that the wills were official extracts from a register and not original wills).

In my opinion, even if the solicitor is doing the full estate administration from data gathering to asset distribution, £11,000 is a ridiculous price for the estate you have described unless there is something unusual and difficult about it e.g. warring beneficiaries/executors.

aemcl

Your advice is very good. I’ve now asked the same question of 3 different people at HMRC and got different answers. The guy I spoke to today was very good and completely honest about the mess they are in re giving people correct information. I think I will start a C1/C5 approach and if I get a complaint I’ll be able to say I was told my forms never arrived anyway. This estate is quite simple and when mum died she left nothing personally so I’ll just do an IHT 217 to bring it all under the tax limit. It’s a great pity they don’t just invoke the Residence nil rate allowance when they see the main residence is being left to the children simply as stated in the Will but that would be too easy. 

aemcl

I’ve now received my letter from HMRC giving the code to allow me to apply through the Sheriff Court for Confirmation. At the moment they don’t sent back your Form C1 so you have to have kept a copy. 

After taking the form plus the HMRC letter to Dundee Sheriff Court I suddenly had a new worry. 

When listing heritable property do I have to
a.  Give details of where the property is registered i.e. Register of Scotland or Sasines Register?
b.  Send them apogee original deeds?

I thought my only worry would be the wording in the declaration. Don’t think I’m going to sleep till all this is over. 

Anyone able to advise?

aemcl

the original deeds