Confirmation process

Kazieme

Hello. Trying to get to grip with complexities of the confirmation process. 

Can I please check with this group if my interpretation of the pertaining IHT rules for grant of confirmation of my mother in laws estate, and forms to be completed, are correct. She died Jan 2023. 

The value of her estate is roughly £680,000

(Property value c£360,000 and bank/investments of £320,000) 

She has available to be transferred to her estate her  husband’s entire £325000 NRB (he died some 20 years ago.) to be added to her own £325,000 NRB allowance.

 In addition, there is  100% of RNRB of £175000 x 2 - available to be added  - she is leaving her property , wholly passed to her on her husband’s death to her 2 children. 

Is it correct that based on above, her estate is classed as exempt?

Am I also  right that as no IHT is therefore due, only form C1 requires to be completed for confirmation?

Am hoping my reading of this is right, but will appreciate knowing if any of above is off track. 

Thanks in advance for any input. 

buddy9

Even though there is no IHT liability, the estate is outwith the 'excepted estate' limits and you will require to submit IHT 400 to HMRC (along with a copy of form C1) before you can submit your application to the sheriff court.

Keep_pedalling

As above, as soon as you need to claim the residential NRB a full IHT return is required.

Kazieme

Thanks, both, for clarification. Appreciated. 

Kazieme

Kazieme said:

Thanks, both, for clarification. Appreciated. 

Seems obvious now that an IHT form would be required if you want to claim a tax concession. Think this process induces brainfog!

Thank goodness for a helpful forum to keep you right. 

Keep_pedalling

Kazieme said:

Kazieme said:

Thanks, both, for clarification. Appreciated. 

Seems obvious now that an IHT form would be required if you want to claim a tax concession. Think this process induces brainfog!

Thank goodness for a helpful forum to keep you right. 

Not all exemptions, if you only needed the NRB and transferable NRB then a return is still not required.

Kazieme

Now doing form IHT402 to transfer NRB from dad to mum’s estate. 
Dad left in will everything to spouse - but nothing was itemised, and no values declared.  Also no confirmation.  

Stumped therefore at Q7 - net value of spouse estate passing under will….. 

Phoned tax office for advice…I was told to check with probate registry…I said did not see the point if probate was not applied for….so not sure what to do. 

is 0 an acceptable answer to this question?

Also, for avoidance of doubt, is it correct that 325k is available to be transferred as unused portion, even though IHT at time of first death in 1990 was only £128k? 

buddy9

I wasn’t sure of the relationship - you mention mother in law and husband - but also mum and dad.

Presumably (FIL’s ?) house ownership passed to spouse by means of a survivorship clause in the title and Confirmation wasn’t required to facilitate transfer.

£325k transferable NRB is potentially available even though NRB at time of first person’s death was lower. It is calculated on percentages used.

It must be unlikely that (FIL’s?) estate value was zero. The guidance in the IHT manual is to complete the claim to the best of your ability and based on the information available. See 

IHTM43011 - Dealing with a claim: action in Risk: first death before 9 October 2007 - HMRC internal manual - GOV.UK

Kazieme

Thanks so much for response; and thanks also for link to guidance, very helpful. 

The relationships are:  am doing the background and paperwork  work for my husband, whose mother died Jan 23 and father died 1990 -  called mum and dad for shorthand. 

Mum learnt to keep meticulous records when she had to become responsible for doing so. I was surprised there was no evidence or papers relating to confirmation for dad, but as there is nothing in her papers about this, I have to assume it was not applied for.  Did a quick fruitless search online. We will go back to her solicitor and enquire specifically if they hold any correspondence, but for over 30 years ago I am not hopeful. 

However, your words about house ownership passing to spouse etc prompted a memory of seeing the property Land Certificate in her papers. The proprietorship section states as ‘spouses’ they own ‘equally between them and the survivor of them.’ I take it that this is the survivorship clause you referred to?

The consideration was £29,000 - so I assume we should put half this against Dad’s estate value.

There are no bank statement records that go back 30 or so years to dad’s death, so again can only assume that accounts were jointly held, and thus passed to mum automatically. Should I put an arbitrary figure down to reflect this?

Thanks again for input. 

buddy9

Kazieme said:

However, your words about house ownership passing to spouse etc prompted a memory of seeing the property Land Certificate in her papers. The proprietorship section states as ‘spouses’ they own ‘equally between them and the survivor of them.’ I take it that this is the survivorship clause you referred to?

Yes. The house share will have passed by survivorship outside of the will. From a conveyancing perspective MIL's confirmation certificate will allow house sale/transfer.

The consideration was £29,000 - so I assume we should put half this against Dad’s estate value.

This will have been the purchase price. I don't see anywhere on IHT 402 that needs the house value included. Box 7 asks for net estate value under will or intestacy - the house share didn't pass by the will or intestacy

There are no bank statement records that go back 30 or so years to dad’s death, so again can only assume that accounts were jointly held, and thus passed to mum automatically. Should I put an arbitrary figure down to reflect this?

If there are no records, then entering a nominal, estimated or arbitrary value at box 7 in respect of savings, investments and possessions looks appropriate. I would also describe the value as such on the form. Because everything passed to spouse, my understanding is that the values against boxes 13 to 17 would be zero.

See above 

Kazieme

Thanks again