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Advice with IHT please!



Comments
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The scope for paying inheritance tax by instalments is very limited:
https://www.gov.uk/paying-inheritance-tax/yearly-instalments
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Jeremy535897 said:The scope for paying inheritance tax by instalments is very limited:
https://www.gov.uk/paying-inheritance-tax/yearly-instalments
Thanks, I have seen that. Am I right in thinking I could arrange this and make the first payment and then pay it off early once probate is granted?
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Yes, but I doubt the nature of the assets you describe as forming the estate will qualify for payment by instalments.0
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Jeremy535897 said:Yes, but I doubt the nature of the assets you describe as forming the estate will qualify for payment by instalments.I did wonder but it says on the HMRC website, quoting shares as an example?
In yearly instalments
You can pay your Inheritance Tax on things that may take time to sell in equal annual instalments over 10 years.
You must say on Inheritance Tax Account form IHT400 if you want to pay in instalments.
You’ll usually have to pay interest on your instalments. Use the calculator to work out the interest you’ll need to pay.
You must pay the tax in full when you’ve sold the deceased’s assets, such as their house or shares.
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The type of share you can choose to pay by instalments is very limited and won’t apply to most equities people hold.On what type of shares can I pay the tax by instalments?You may pay Inheritance Tax by instalments on shares or securities in a company if:• theygavethedeceasedcontrolofthecompanyatthetimeofthe transfer• theyareunlistedandyoucanshowthattheInheritanceTaxontheirvalue could not be paid in one sum without undue hardship, or at least 20% of the tax for which the same person is liable, in the same capacity, is on assets (including the shares in question) that qualify for payment by instalments• theyareunlistedsharesandtheirvalueismorethan£20,000andthe shares represent at least 10% of the nominal value of the company’s sharesThese shares are shown in boxes 66 and 67 of the form IHT400, not boxes 62, 63 or 65.
It must be quite unusual for an estate in IHT territory to not contain a house or reasonable amount of cash.1 -
handful said:With an estate that is largely tied up in shares,funds, S&S ISA etc, these are now effectively locked until probate is granted.IHT, will be needed to be paid in order for probate to be granted and there are insufficient cash funds available to pay a direct payment from the deceased's account for the full amount that will due. I have looked at some of the specific products available to bridge the finance but the ones I like the look of (e.g Tower Street Finance) have quite high charges and additionally insist on the estate being handled "professionally" so I would also incur other significant costs. I have seen somewhere that a part payment to HMRC may be enough to get probate but nothing definitive. Can anyone offer any experiences or advice on this topic? ThanksThis didn’t used to be the case but is far more common now.I am an Independent Financial Adviser. Any comments I make here are intended for information / discussion only. Nothing I post here should be construed as advice. If you are looking for individual financial advice, please contact a local Independent Financial Adviser.1
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Keep_pedalling said:The type of share you can choose to pay by instalments is very limited and won’t apply to most equities people hold.On what type of shares can I pay the tax by instalments?You may pay Inheritance Tax by instalments on shares or securities in a company if:• theygavethedeceasedcontrolofthecompanyatthetimeofthe transfer• theyareunlistedandyoucanshowthattheInheritanceTaxontheirvalue could not be paid in one sum without undue hardship, or at least 20% of the tax for which the same person is liable, in the same capacity, is on assets (including the shares in question) that qualify for payment by instalments• theyareunlistedsharesandtheirvalueismorethan£20,000andthe shares represent at least 10% of the nominal value of the company’s sharesThese shares are shown in boxes 66 and 67 of the form IHT400, not boxes 62, 63 or 65.
It must be quite unusual for an estate in IHT territory to not contain a house or reasonable amount of cash.
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HappyHarry said:handful said:With an estate that is largely tied up in shares,funds, S&S ISA etc, these are now effectively locked until probate is granted.IHT, will be needed to be paid in order for probate to be granted and there are insufficient cash funds available to pay a direct payment from the deceased's account for the full amount that will due. I have looked at some of the specific products available to bridge the finance but the ones I like the look of (e.g Tower Street Finance) have quite high charges and additionally insist on the estate being handled "professionally" so I would also incur other significant costs. I have seen somewhere that a part payment to HMRC may be enough to get probate but nothing definitive. Can anyone offer any experiences or advice on this topic? ThanksThis didn’t used to be the case but is far more common now.
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handful said:HappyHarry said:handful said:With an estate that is largely tied up in shares,funds, S&S ISA etc, these are now effectively locked until probate is granted.IHT, will be needed to be paid in order for probate to be granted and there are insufficient cash funds available to pay a direct payment from the deceased's account for the full amount that will due. I have looked at some of the specific products available to bridge the finance but the ones I like the look of (e.g Tower Street Finance) have quite high charges and additionally insist on the estate being handled "professionally" so I would also incur other significant costs. I have seen somewhere that a part payment to HMRC may be enough to get probate but nothing definitive. Can anyone offer any experiences or advice on this topic? ThanksThis didn’t used to be the case but is far more common now.
Which company is providing advice, and which platform are the funds held on?I am an Independent Financial Adviser. Any comments I make here are intended for information / discussion only. Nothing I post here should be construed as advice. If you are looking for individual financial advice, please contact a local Independent Financial Adviser.0 -
HappyHarry said:handful said:HappyHarry said:handful said:With an estate that is largely tied up in shares,funds, S&S ISA etc, these are now effectively locked until probate is granted.IHT, will be needed to be paid in order for probate to be granted and there are insufficient cash funds available to pay a direct payment from the deceased's account for the full amount that will due. I have looked at some of the specific products available to bridge the finance but the ones I like the look of (e.g Tower Street Finance) have quite high charges and additionally insist on the estate being handled "professionally" so I would also incur other significant costs. I have seen somewhere that a part payment to HMRC may be enough to get probate but nothing definitive. Can anyone offer any experiences or advice on this topic? ThanksThis didn’t used to be the case but is far more common now.
Which company is providing advice, and which platform are the funds held on?I'm a little bit reluctant to name and shame if this is incorrect at the moment but this is an extract from the deceased's paperwork. I am waiting to receive details of where the investments are held currently but I know just under half is in a S&S ISA and the rest in fund of some sort."Upon notification of your death we will continue to deduct all our normal charges and all pending and scheduled instructions will be cancelled. The value of your account may form part of your estate for inheritance tax purposes and once a ‘grant of representation’ has been issued we will accept instructions from your legal representatives. Your account will remain invested in assets until we receive instructions to sell them."
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