Is this an excepted estate?

spider42

My dad died in April, and I'm helping mum apply for probate (online). However I'm a bit stuck in ascertaining whether the estate is an excepted estate, as the guidance appears to be contradictory.

His estate is worth about £670k. The Will left £15k each to me and my sister and the rest goes to mum (they were married, so spouse exemption applies). Clearly no IHT is due, as only £30k is chargeable.

The guidance on the online probate application itself (and also the page they link to for further guidance) says:

An estate is usually an excepted estate if any of the following apply:

• its value is below the current Inheritance Tax threshold
• the estate is worth £650,000 or less and any unused threshold is being transferred from a spouse or civil partner who died first
• the deceased left everything to a spouse or civil partner living in the UK or to a ’qualifying’ charity and the estate is worth less than £3 million
• the deceased lived permanently abroad (a ’foreign domiciliary’) and died abroad and the value of their UK assets is under £150,000

I don't think any of the above apply. Estate value is over £325k and £650k, so bullet points 1 and 2 can't apply. Bullet point 3 doesn't apply, as not everything is left to a spouse. Bullet point 4 is not applicable.

But the conditions in the IHT400 guidance notes include:

• the gross value of the estate does not exceed £3 million and the net chargeable value of the estate after deduction of liabilities and Spouse or Civil Partner Exemption and/or Charity Exemption only does not exceed the Inheritance Tax threshold 

So it would meet the conditions in the IHT400 guidance.

Why does one say they estate must be worth less than £3m and everything is left to a spouse, and the other says that the estate must be worth less than £3m and the net value of the estate (after deducting the spouse exemption) must be less than the IHT threshold? Which one is correct?

Flugelhorn

Did your parents jointly own their property?

spider42

Yes, as joint tenants.

Flugelhorn

OK - couple of things - check whether you really need probate. Mum now owns the house are there any investments etc that require probate?
Is that the value of the estate with the whole value of the house included or just half of it?

spider42

Yes, we definitely need probate. here are some investments and bank accounts in just his name, who have requested probate. The £670k value only includes half of the house value.

buddy9

spider42 said:

Why does one say they estate must be worth less than £3m and everything is left to a spouse, and the other says that the estate must be worth less than £3m and the net value of the estate (after deducting the spouse exemption) must be less than the IHT threshold? Which one is correct?

This is an excepted estate because the NQV is less than £325k.