Excepted Estate - utter confusion!

jessthecat_2

Hi. Dad's estate is worth around £850k (house 500, banks etc 350). Mum's estate went directly to Dad when she died many years ago. So my understanding is that we have 2x parents' allowances, including the family home, giving an IHT allowance of £1m. As this is significantly below that, does this count as an Excepted Estate? So we just fill in PA1P as there's nothing to pay? The forms aren't at all clear and the online calculator seems to just assume a limit of £325k.

Also, the executor is too doddery now to cope with this, they've filled in the form to renounce, leaving my sister & I (as the only beneficiaries) to apply for probate. Is there anything else we need to submit?

Thanks  

polar_pig

Assuming the property has been left to you and/or your sister and your Dad didn't give away more than £150k in the last 7 years of his life, you should be able to claim £1m IHT allowance against his estate without paying tax.

However, it's not an 'Excepted Estate' as the estate is worth more than £650k therefore you can't just fill in PA1P. To get both Resident Nil Rate Bands from your Mum and Dad (2x £175k) to make it up to £1m, you have to apply for it. This will involve filling in IHT400 along with any associated forms, as necessary. See:

https://www.gov.uk/valuing-estate-of-someone-who-died/check-type-of-estate

The following link gives details how an executor can appointing someone else to apply for probate.

https://www.gov.uk/applying-for-probate/if-theres-a-will#:~:text=Appoint someone to apply on,their right to apply permanently

Keep_pedalling

As above, you will need to file a full IHT return before you apply for probate. Strictly speaking you will be applying for a  ‘grant of letters of administration with will annexed’ as you are not named executors but the process is the same.

If you get stuck please don’t hesitate to ask questions, the process may look complicated but should not need the help of expensive professional help. The first step is to work through the IHT400 form to see which supplementary forms you need. 

jessthecat_2

Many thanks for your help, no doubt I'll be back shortly with more questions!  

jessthecat_2

Keep_pedalling said:

As above, you will need to file a full IHT return before you apply for probate. Strictly speaking you will be applying for a  ‘grant of letters of administration with will annexed’ as you are not named executors but the process is the same.

Hi, I'm reading the IHT 400 Notes and on page 4 it says:

You need a grant of representation to get access to most assets in the deceased’s estate. There are a number of different types of grant. In England, Wales and Northern Ireland, the 2 most common types are:
 • a grant of probate – where the deceased has left a will
• a grant of letters of administration – where the deceased has not left a will

The deceased did leave a will, but the executor has renounced. So according to that we're applying for a grant of probate. There's so many contradictions on the forms!

RAS

No, you apply for administration of the estate (with will).

Essentially it's very similar to probate but only an executor can apply for probate.

The executor could have just instructed you to do the paperwork, and signed but that is water under the bridge.

The huge difference between applying with will, is that you have to pay out as instructed by the will. Simple administration requires that the estate is paid out as required by the laws of intestacy.

polar_pig

RAS said:

The executor could have just instructed you to do the paperwork, and signed but that is water under the bridge.

In the first post the OP said that that the executor filled in the form to renounce. We don't know if it was ever sent off. If not, with agreement of the executor, the form could be destroyed and he could 'instruct' the OP to do the paperwork.

jessthecat_2

Many thanks.

Onto IHT436, Q7 Total value of spouse's estate.
Mum died almost 30 years ago, when we were kids. How on earth are we supposed to know the value of her estate in 1994?!

Keep_pedalling

If her executor had to apply for probate then the value can be obtained from the  probate office, if not you are going to have to take an educated guess. Without probate, like you,  HMRC have no way of checking the actual value so you are not going to be challenged. Only if her estate exceeded £2M would this be a cause for concern.

jessthecat_2

Thanks
A general question: We're at the stage where there's no executor remaining and we don't yet have probate, but there is a will naming my sister & I as the only beneficiaries. Will banks etc speak to us at this stage, in order for us freeze accounts and get current balances? As currently our only status is beneficiary/next of kin.

Keep_pedalling

jessthecat_2 said:

Thanks
A general question: We're at the stage where there's no executor remaining and we don't yet have probate, but there is a will naming my sister & I as the only beneficiaries. Will banks etc speak to us at this stage, in order for us freeze accounts and get current balances? As currently our only status is beneficiary/next of kin.

Although not named as executors you will be applying for letters of administration with will annexed, so you are the administrators as well. Most banks have quite high limits in how much they will pay out without obtaining probate / letters of administration so you may be able to release some funds before you have LOA in place. Contact the bereavement department of each bank to inform them of the death, and they will freeze the accounts. Once you have provided a death certificate and proof of your ID they should release the funds unless the amount is large and they also need letters of administration.