Question about Inheritance Tax

cfw1994

Sorry for your mum’s condition, must be tough.

Not sure if this might help….

My partner did the probate application after her mother passed June 2022.
Admittedly she was away from it for about 5 weeks, but it still took her until November to complete the paperwork: there were a daft number of forms needed: I think about 12+ in the end 😳
Much time was also spent over the past year with her siblings clearing the ‘family home’…..which was time well spent for them….& they all have the free time, not being in paid employment!

Probate took about 4 months to arrive: the house went on the market in Feb and has just sold subject to contract - could easily be another 4 months, we feel (total chain of 3).
She is about in the position now to start properly distributing things out.

I guess what I am saying is that when the time comes, if you don’t feel confident, it might be worth paying a solicitor to take the task on: it is laborious and time consuming.
I suspect we will have saved a reasonable 5-figure sum doing it ourselves (with me as primary idea-bouncer!), but it is at time confusing….& with other things going on, I would have hoped a good solicitor might have completed things a fair bit quicker….maybe. 

The volume of paperwork meant my pool table as also unusable for a year 😱

It looks like people here can help point you in the right direction, & from what you have written, I would be astonished if there was any IHT to pay, but only you can do the legwork, or pay someone to do that for you 🤷‍♂️

Keep_pedalling

Littlereggie said:

So my parents had a property worth £260,000 and in 2017 my mum downsized and moved to a smaller property now worth £190,000. How does this impact my late fathers nil rate band? Would it still give me £175k on his nil rate band IHT436? As my mother has purchased a property of lower value would this affect her residential nil rate band IHT 435 of £175k? The total value of the estate is roughly £730,000. 

Exactly when in 2917 did your mother downsize? The RNRB came in in April of that year, if she downsized before then the downsizing rule does not apply. If she downsized before then then the maximum that can be claimed under the 2  x RNRB is £190k, if later then it will be £260k, in both cases only a part of your fathers RNRB exemption can be claimed not the full amount. 

if your father left everything to your mother then the RNRB does not come into play unless her total net worth exceeds £650k (2x NRB).

Littlereggie

My mum downsized in August 2017. What happens to her current account on death, as there may be rebates or money owing from her two pensions and utility bills etc. It says online that I have to work out all her assets and debts before completing any inheritance tax forms, so I am assuming I will need to do lots of phoning around to banks, utility companies etc to find out values and any money owed to her or any money her estate needs to pay back.  It does seem a lot of work and I’m in two minds if to do it myself, or get a solicitor involved.  If a solicitor was used was is the likely charge on an estate worth £730,000? Any advice would be greatly received. 

Keep_pedalling

Littlereggie said:

My mum downsized in August 2017. What happens to her current account on death, as there may be rebates or money owing from her two pensions and utility bills etc. It says online that I have to work out all her assets and debts before completing any inheritance tax forms, so I am assuming I will need to do lots of phoning around to banks, utility companies etc to find out values and any money owed to her or any money her estate needs to pay back.  It does seem a lot of work and I’m in two minds if to do it myself, or get a solicitor involved.  If a solicitor was used was is the likely charge on an estate worth £730,000? Any advice would be greatly received. 

If sounds like a reasonably straight forward estate and you should not have to employ a solicitor which will only add costs and increase the time to wind up the estate dramatically. Even if you employ a solicitor you will still have to do a lot of the dinkey work in getting all the numbers together.

On anyone’s death banks need to be informed asap, the account will be closed so no more payment can come in out with the exception perhaps of funeral costs.

Assuming your mother inherited everything from your father her estate will owe no IHT which takes the pressure off as you wound have a big bill to pay within 6 months. As long as the figures submitted on the IHT are reasonably accurate you will be fine HMRC don’t go over everything with a fine tooth comb.

msb1234

Why not wait until your mum has actually passed away, then employ a solicitor. They will know exactly what forms to fill in. Its not like you can send anything off now and if its just causing you stress, leave it to the professionals.

Keep_pedalling

msb1234 said:

Why not wait until your mum has actually passed away, then employ a solicitor. They will know exactly what forms to fill in. Its not like you can send anything off now and if its just causing you stress, leave it to the professionals.

Some people (I am one of them) deal best with with these situations by being practicable and hands on. If the OP is like me they would be unwise to loose control by handing control to a solicitor.