I'm Not Sure If I Need To Complete IHT Forms....

Cafe_Racer

Hello there!
I have a question regarding whether I need to complete IHT forms or not.

Mum, Dad and I were all Tenants in Common.

Mum died in 2019 and when I collected her Will from the solicitor I was informed that probate was not required as Mum's Will stated that Mum's estate is to be passed to Dad (Tenant In Common). Mum's Will appointed Dad and I as Executors and Trustees 

Dad recently died in December 2021. Again, the solicitor has said that there is no need for probate as Dad's estate has passed to me (Tenant In Common).  Dad's Will stated that his estate is to be passed to Mum and if she predeceased him then his estate would be passed to me. Dad's Will appointed Mum and I Executors and Trustees.

I've recently had a RICS Survey / Valuation undertaken which identified that the house is currently valued at £295k
Dad had £3.5k in a bank account (it was a joint account with Dad and I)

I've been going over past bank statements etc and can identify that gifts given by Mum within 7 years of her  death means that she has £259k IHT allowance unused and with Dad, there is £289 unused IHT allowance. So with both of these added together it is far more that the total of the estate's value.

Regarding the house, I live at the property, it is my only property/address. 


1) Given that the RICS valuation of the house is below the IHT threshold and there is no probate to apply for, do I need to complete any IHT forms and if so which ones?

2) I will need to use some of Mam's IHT allowance to cover the total value of the estate. Does this mean IHT forms are required?

3) Lastly, when Mum died, I mistakingly thought that IHT / Probate were one and the same process and I did not complete any IHT forms when she died as her estate passed to Dad.... Should I have completed a IHT form?... and if so how can I remedy this? 

Any assistance / guidance would be very much appreciated!   

  

  

Savvy_Sue

Rest easy on your mum's IHT situation: no IHT if all left to spouse.

Keep_pedalling

There is no reason to submit any IHT forms for your father either. 

Cafe_Racer

Many thanks for the replies.  

Keep_pedalling, could you elaborate as to why I don't have to do a IHT form for Dad please. Just so I have a good understanding.

Is it because I was a Tenant in Common rather than a named beneficiary?     

What about the fact that after taking into consideration gifts, Dad's unused IHT allowance is £289k which is less than the value of the estate at £295k.

Again, is because of me being a Tenant in Common rather than just a named beneficiary on the Will? 

I've read that IHT forms changed on 01-Jan-22 ......Dad died Dec 2021 

(It just seems too good to be true that I don't have probate to do AND no IHT forms to complete!!) 

Thanks again.

noh

You already own 1/3 of the house.
Your father owned 2/3 of the house having inherited 1/3 from your mother.
You state the house is now valued at £295k.
Therefore the value of your fathers estate for IHT purposes is 2/3 x £295k = £196666 plus half of the joint bank account £1750. A total of £198416

Cafe_Racer

noh said:

You already own 1/3 of the house.
Your father owned 2/3 of the house having inherited 1/3 from your mother.
You state the house is now valued at £295k.
Therefore the value of your fathers estate for IHT purposes is 2/3 x £295k = £196666 plus half of the joint bank account £1750. A total of £198416

As crazy as it sounds, I'd completely forgotten that I actually have a 1/3 share of the house!! I think I've focused so much on my parents' situation. So thanks for reminding me my 1/3 share.

Dad's unused IHT allowance is much greater than the estate's value now that my 1/3 has been disregarded.  

I'm very pleased to learn that I have no IHT forms to complete as some of what I looked at appeared to be complex.