IHT Final Assessment

Dougdee

We have gone through the full performance for my Mother's Estate.

There was IHT to pay in the order of £250,000. Because, at that stage, probate had not been granted and my Mothers house had not yet been sold there was no money in the executor account to pay the full IHT bill. We therefore requested to pay in installments over ten years and paid 10% from one of her accounts as the first payment. Probate was then granted.

Since then the majority of my Mother's investments have been liquidated and, most importantly, the sale of her house has completed. As a result we now have sufficient funds available to pay the remaining IHT and would like to do that before distributing the estate.

Because the IHT remaining attracts interest, it is necessary to request in writing a 'Final Assessment' from HMRC. This has been done but, so far, there has been no answer.

Can anyone who has been in the same position suggest how long it takes for HMRC to respond?

Best Regards,

Doug

Secret2ndAccount

I am not in your position, so I can't give you a perfect answer. However, interest accrues constantly. Are you getting good interest on the cash from the house sale?  In your position, I would consider making a large payment to HMRC - sufficient to pay the full remaining IHT, and maybe a bit of interest if you can figure out what it is. You can settle up the final bill once you can figure out what it is. As long as you owe them 200k, the amount owing will increase every day. If you only owe them £100 then the interest isn't really going to mount up.
I currently owe HMRC 50p in IHT and they've told me not to pay it.

handful

Dougdee said:

We have gone through the full performance for my Mother's Estate.

There was IHT to pay in the order of £250,000. Because, at that stage, probate had not been granted and my Mothers house had not yet been sold there was no money in the executor account to pay the full IHT bill. We therefore requested to pay in installments over ten years and paid 10% from one of her accounts as the first payment. Probate was then granted.

Since then the majority of my Mother's investments have been liquidated and, most importantly, the sale of her house has completed. As a result we now have sufficient funds available to pay the remaining IHT and would like to do that before distributing the estate.

Because the IHT remaining attracts interest, it is necessary to request in writing a 'Final Assessment' from HMRC. This has been done but, so far, there has been no answer.

Can anyone who has been in the same position suggest how long it takes for HMRC to respond?

Best Regards,

Doug

I will follow this with some interest. I will be finding myself in a similar position but with investments, shares, funds, S&S Isa etc which are frozen until probate is granted and that won't happen if the IHT isn't paid in full. There is insufficient cash to settle in full and bridging finance looks very expensive so I'm exploring your chosen path using the installment plan. If interest just stops after the outstanding amount is repaid in full and without penalty this may well be the cheapest option. The will is fairly straightforward (or at least appears to be for now!) so a very early settlement should be possible.

Secret2ndAccount

handful said:

.... If interest just stops after the outstanding amount is repaid in full and without penalty this may well be the cheapest option. The will is fairly straightforward (or at least appears to be for now!) so a very early settlement should be possible.

That is how it works. You can overpay any amount any time.

handful

Secret2ndAccount said:

handful said:

.... If interest just stops after the outstanding amount is repaid in full and without penalty this may well be the cheapest option. The will is fairly straightforward (or at least appears to be for now!) so a very early settlement should be possible.

That is how it works. You can overpay any amount any time.

Thanks but I don't think the type of investments that are held would allow for the instalment plan to be accepted. I might contact HMRC to be sure but having spent some time researching I fear it won't be allowed.

Dougdee

Today I received two forms, IHT301 and IHT302 from HMRC. The forms are the replies from HMRC to the 'Final Assessment'. It has taken one month for them to repond. I think that is not unreasonable as a time frame.

The content itself was depressing and I fear that there will be a period of argument in the future.