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Valuation for probate - gifts and assets held in trust?

waveyjane
Posts: 248 Forumite


I'm doing the online probate form for my father's estate. He had a will and is survived by his wife.
When it says "What are the values of the estate for probate?" it asks for "Gross value in £", it also says:
This is the total value of the deceased’s assets in their sole name.
To work this out, subtract the values of any joint assets passing to the other joint owner, foreign assets, all gifts and assets held in trust from the gross value of IHT.
In the previous section, I gave the gross estate value for IHT so I know that.
My first quesiton is about the wording "all gifts and assets held in trust".
Does that mean "all gifts, and assets held in trust" or is it referring to some obscure type of gift that can be made in a trust (that is a "gift held in a trust")? I'm assuming it's two separte things though - yes? But commas, people!
My second question is about the trust. My father's will has a Nil Rate Band Discretionary Trust, which says (I think) that an amount of cash up to the value of the Nil Rate Band can be managed and distribtued to benficiaries by the named trustees pretty much how they want (subject to a loose letter of wishes).
So, do I subtract the value of that trust? So this makes the "Gross value in £" equal to:
- All assets in his sole name
- Less the value of gifts above the allowance (made inside 7 years)
- Less the value of the NRBDT (ie £350,000)?
Oh and also, the house they have and and BTL are both held as "tenants in common" (not the more usual "joint tenants") 50/50. Does that mean I treat his half of those properties as assets in his name only? I think in the case of joint tenants the houses would not be part of the Gross value as they would pass to my mother?
Thanks for any help!
In the previous section, I gave the gross estate value for IHT so I know that.
My first quesiton is about the wording "all gifts and assets held in trust".
Does that mean "all gifts, and assets held in trust" or is it referring to some obscure type of gift that can be made in a trust (that is a "gift held in a trust")? I'm assuming it's two separte things though - yes? But commas, people!
My second question is about the trust. My father's will has a Nil Rate Band Discretionary Trust, which says (I think) that an amount of cash up to the value of the Nil Rate Band can be managed and distribtued to benficiaries by the named trustees pretty much how they want (subject to a loose letter of wishes).
So, do I subtract the value of that trust? So this makes the "Gross value in £" equal to:
- All assets in his sole name
- Less the value of gifts above the allowance (made inside 7 years)
- Less the value of the NRBDT (ie £350,000)?
Oh and also, the house they have and and BTL are both held as "tenants in common" (not the more usual "joint tenants") 50/50. Does that mean I treat his half of those properties as assets in his name only? I think in the case of joint tenants the houses would not be part of the Gross value as they would pass to my mother?
Thanks for any help!
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Comments
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waveyjane said:I'm doing the online probate form for my father's estate. He had a will and is survived by his wife.When it says "What are the values of the estate for probate?" it asks for "Gross value in £", it also says:This is the total value of the deceased’s assets in their sole name.To work this out, subtract the values of any joint assets passing to the other joint owner, foreign assets, all gifts and assets held in trust from the gross value of IHT.
In the previous section, I gave the gross estate value for IHT so I know that.
My first quesiton is about the wording "all gifts and assets held in trust".
Does that mean "all gifts, and assets held in trust" or is it referring to some obscure type of gift that can be made in a trust (that is a "gift held in a trust")? I'm assuming it's two separte things though - yes? But commas, people!
That is referring to trusts that your father was a beneficiary of not trusts his will creates.
My second question is about the trust. My father's will has a Nil Rate Band Discretionary Trust, which says (I think) that an amount of cash up to the value of the Nil Rate Band can be managed and distribtued to benficiaries by the named trustees pretty much how they want (subject to a loose letter of wishes).
So, do I subtract the value of that trust? So this makes the "Gross value in £" equal to:
- All assets in his sole name
- Less the value of gifts above the allowance (made inside 7 years) Yes
- Less the value of the NRBDT (ie £350,000)? No
Thanks for any help!
I think you would be well advised to take professional advice.1 -
Ah, thanks for clarifying the trust thing. And yes, we're going to sit down with solicitors about whether to keep that (there are pros and cons).
BTW I just edited my question (you were too quick!) about the properties being tenants in common. Do you know about that?0 -
waveyjane said:Ah, thanks for clarifying the trust thing. And yes, we're going to sit down with solicitors about whether to keep that (there are pros and cons).
BTW I just edited my question (you were too quick!) about the properties being tenants in common. Do you know about that?
A IPDI (Immediate post-death interest) trust may be more appropriate than the NRB trust, this will provide his wife (your mother?) with security and protect your fa there’s inheritance without any negative tax. Implications.1 -
I have the same question regarding what to subtract from the Gross Value for IHT to get the Gross Estate Value for Probate!
My wife recently died and we owned our house as Tenants in common 50/50. I now have the right to live there till I die from her will. I understand that it goes into trust. But does the half value of the house get subtracted? What did your solicitor advise?0 -
Wingnut1001 said:I have the same question regarding what to subtract from the Gross Value for IHT to get the Gross Estate Value for Probate!
My wife recently died and we owned our house as Tenants in common 50/50. I now have the right to live there till I die from her will. I understand that it goes into trust. But does the half value of the house get subtracted? What did your solicitor advise?
Her half of the house still forms part of her estate for both IHT and probate purposes event though it is exempt from IHT. On your death the whole house is part of your estate for IHT purposes only.1 -
Keep_pedalling said:Wingnut1001 said:I have the same question regarding what to subtract from the Gross Value for IHT to get the Gross Estate Value for Probate!
My wife recently died and we owned our house as Tenants in common 50/50. I now have the right to live there till I die from her will. I understand that it goes into trust. But does the half value of the house get subtracted? What did your solicitor advise?
Her half of the house still forms part of her estate for both IHT and probate purposes event though it is exempt from IHT. On your death the whole house is part of your estate for IHT purposes only.0 -
ahfat41 said:Keep_pedalling said:Wingnut1001 said:I have the same question regarding what to subtract from the Gross Value for IHT to get the Gross Estate Value for Probate!
My wife recently died and we owned our house as Tenants in common 50/50. I now have the right to live there till I die from her will. I understand that it goes into trust. But does the half value of the house get subtracted? What did your solicitor advise?
Her half of the house still forms part of her estate for both IHT and probate purposes event though it is exempt from IHT. On your death the whole house is part of your estate for IHT purposes only.
On your wife’s death her half went into the immediate posts death interest trust and it does form part of her estate, however at this point the eventual beneficiaries (remaindermen) are not the beneficial owners, you, as the life tenant, are the beneficial owner.
Because beneficial ownership passes to a spouse, it is covered by spousal exemption therefore it is not subject to IHT and none of her NRB or RNRB is used so that can all be transferred to your estate on your death.
On your death your share forms part of your estate as does the half in trust because you were the beneficial owner and it was not subject to IHT on her death.
For taxation purposes the outcome is the same as if she left you her share directly to you, both for IHT and CGT.3 -
Thank you very much for taking time to explain this to me. I do understand now.0
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