Valuing cash savings accounts for probate / IHT.

bigandy2

Hi,

I'm valuing my late mother's estate, which will be liable for IHT.

Most of her wealth was spread around a dozen cash savings accounts, for which I have the online IDs and passwords.

My question: Do I need to contact each bank by letter to get an official valuation for probate, or can I use my online access?

My own values might be slightly out, but any IHT under/overpayment can be corrected later.

I expect I need official valuations for her more volative equity investments.

regards and thanks,

-andy

kuratowski

Sorry for your loss.

For probate and IHT purposes, the amount needs to include accrued interest, so the values will usually not be the same as the amounts you see on screen by logging on to online banking.

You need to contact each bank, providing a death certificate (possibly an image supplied electronically).  Most banks have an online form you can use to tell them, or a bereavement phone line, in most cases you don't need to write by post.  You can even tell several banks at the same time, using the death notification service.  They will then write to you, giving the correct amounts you can use for probate and IHT.

It is important to go through the proper bereavement notification process, in order that the accounts are frozen to prevent any unauthorised access.  Moreover, it would be likely be a breach of the banks' terms and conditions to continue to access them via online banking after your mother's passing.

Nearlyold

As above plus you also need to contact the equity based investment providers to inform them of your Mum's passing and get a value for the date of passing. With all the different classes of shares, issues or fund names etc the investments may have gone through over the years it's the easiest way to get the correct figures.

Keep_pedalling

kuratowski said:

Sorry for your loss.

For probate and IHT purposes, the amount needs to include accrued interest, so the values will usually not be the same as the amounts you see on screen by logging on to online banking.

Interest paid after the testator has died is subject to income tax not IHT so the balance at the time of death is what is needed for the IHT return.

It’s a bit different to ex dividend shares where the declared dividend has to be included in the IHT valuation.

You need to contact each bank, providing a death certificate (possibly an image supplied electronically).  Most banks have an online form you can use to tell them, or a bereavement phone line, in most cases you don't need to write by post.  You can even tell several banks at the same time, using the death notification service.  They will then write to you, giving the correct amounts you can use for probate and IHT.

It is important to go through the proper bereavement notification process, in order that the accounts are frozen to prevent any unauthorised access.  Moreover, it would be likely be a breach of the banks' terms and conditions to continue to access them via online banking after your mother's passing.

Although strictly true the banks are not going to do anything about the OP accessing the accounts to note the values.

You can obtain the historic valuation of individual shares and funds online from Yahoo Finance and similar sites.

Keep_pedalling

You say the estate will be subject to IHT but have you taken into account all her exemptions such as the residential NRB and, if she was a widow, the transferable NRBs?

kuratowski

Keep_pedalling said:
Interest paid after the testator has died is subject to income tax not IHT so the balance at the time of death is what is needed for the IHT return.
It’s a bit different to ex dividend shares where the declared dividend has to be included in the IHT valuation.

I have seen this often posted on here, but it's not correct.  It is contradicted by the very first line of IHTM10071:

The value returned should include the amount in each bank account at the date of death and any interest that accrued, but was not paid or credited to the account, up to the date of death. The bank or building society will be able to give taxpayers this information. 

From IHTM10071 - Bank and building society accounts : investigating values - HMRC internal manual - GOV.UK (www.gov.uk)

Accrued interest should be included on IHT406 under the heading "Amount held, including interest".  Such amounts are subject to both inheritance tax and income tax, just like any other income the deceased received but did not spend in the year of death.  Even interest accrued on ISAs should be included:

If you have any evidence to suggest that the deceased had an interest in an Individual Savings Account (ISA), or any other tax-exempt savings account you should check that the interest has been included, as some taxpayers incorrectly think that the tax-exempt status applies for Inheritance Tax.

Keep_pedalling

On the other hand.

https://www.gov.uk/hmrc-internal-manuals/trusts-settlements-and-estates-manual/tsem7458#:~:text=Interest%20is%20taxable%20when%20it,deceased%20was%20due%20to%20pay.

HMG don’t make things simple.

bigandy2

Thank you all for your replies.