IHT Loan question and letter of admin a

marc3

I realise i may be medium term fortunate-but equally short term-major issues.
scenario:
Father passed away unexpectedly .No spouse .
my wife is sole child,and hence beneficiary of estate.
No will -hence letter of administration application-will take 8-10 months to ger resolved most likely .
A  likely IHT obligation due in 6 months .
clock ticking -been waiting final death cert for 8 weeks-that alone can take 12 weeks  apparently in nottingham  .
This looks lke november resolution,but IHT due in June.

Have no funds available to pay IHT .
seems ridiculous at the extreme  thay may have to go bankrupt to ensure get future money  as i cannot  currently pay IHT.
Only choice seems to be get an IHT loan.

Has anyone got experience of IHT loans and recommened good/bad providers and pitfalls .

That given-unlikely but always a slim chance that i may not be granted probate/letter of admin /sole beneficiary (no knowledge of long lost sister in outer mongolia but you never know what may come out of the woodwork )

so how does that work -IHT due to be paid by someone in June-most likely me -but i will not have  absolute certainty that i will inherit until letter of admin arrives probably at year end.
In the extreme -i could end up paying IHT but get no eventual financial gain/be beneficiary at the end .again-unlikely but i am sure that has happened once or twice .

ultimately i am grateful but at moment :

all seems crazy/upside down -advice/help /guidance based on what actually happens /what you can do - please.
thank you 

Albermarle

Father passed away unexpectedly .No spouse .
my wife is sole child,and hence beneficiary of estate.

Can you just clarify? You say your wife is sole beneficiary, but that your Father passed away and you are liable for paying IHT ?

[Deleted User]

Have to say - that’s quite difficult to read. However, does this help as another option?

https://www.gov.uk/paying-inheritance-tax/yearly-instalments

Keep_pedalling

First off let’s establish if there is actually an IHT liability in the first place. What is the approximate value of his estate?  What was his marital status?  Does his estate include his home and if it does what is its value? 

marc3

Albermarle said:

Father passed away unexpectedly .No spouse .
my wife is sole child,and hence beneficiary of estate.

Can you just clarify? You say your wife is sole beneficiary, but that your Father passed away and you are liable for paying IHT ?

fair comment-lazy and non pedantic  me couldnt bother to claify.Wife sole beneficiary (upon receipt of letter of admin )and my f in law.
dont think that materially affects how it pans out-but you are correct -a bit ambiguous .

marc3

Keep_pedalling said:

First off let’s establish if there is actually an IHT liability in the first place. What is the approximate value of his estate?  What was his marital status?  Does his estate include his home and if it does what is its value? 

doing 'fag packet' sums at moment but yes -there will be a IHT obligation (and i am aware that some can be offet against his deceased wifes allowance ) of which property is approx 50% of estate value 

Keep_pedalling

marc3 said:

Keep_pedalling said:

First off let’s establish if there is actually an IHT liability in the first place. What is the approximate value of his estate?  What was his marital status?  Does his estate include his home and if it does what is its value? 

doing 'fag packet' sums at moment but yes -there will be a IHT obligation (and i am aware that some can be offet against his deceased wifes allowance ) of which property is approx 50% of estate value 

Have you also included the residential NRBs which could take the exemptions up to £1M?

marc3

Keep_pedalling said:

marc3 said:

Keep_pedalling said:

First off let’s establish if there is actually an IHT liability in the first place. What is the approximate value of his estate?  What was his marital status?  Does his estate include his home and if it does what is its value? 

doing 'fag packet' sums at moment but yes -there will be a IHT obligation (and i am aware that some can be offet against his deceased wifes allowance ) of which property is approx 50% of estate value 

Have you also included the residential NRBs which could take the exemptions up to £1M?

frankly no ,so thanks for that .
am obviously aware of the 325000 allowance but was not aware of the residential nrb element .
would like to think solicitor would be-but i equally like to be ahead of the game-'manage the manager',so thanks again.

i can look it up ,but property value is ironically about the £325,ooo figure so i am not sure if that 'halts' the use of any RNRB or whether that additional £175000 allowance can be offset against cash assets .

xylophone

https://www.gov.uk/guidance/inheritance-tax-residence-nil-rate-band

Grumpy_chap

marc3 said:

doing 'fag packet' sums at moment but yes -there will be a IHT obligation (and i am aware that some can be offet against his deceased wifes allowance ) of which property is approx 50% of estate value 

If the property is half the Estate's value, what is the other half?
Why can't this non-property half be used to settle the IHT liability (if any)?

Keep_pedalling

marc3 said:I

Keep_pedalling said:

marc3 said:

Keep_pedalling said:

First off let’s establish if there is actually an IHT liability in the first place. What is the approximate value of his estate?  What was his marital status?  Does his estate include his home and if it does what is its value? 

doing 'fag packet' sums at moment but yes -there will be a IHT obligation (and i am aware that some can be offet against his deceased wifes allowance ) of which property is approx 50% of estate value 

Have you also included the residential NRBs which could take the exemptions up to £1M?

frankly no ,so thanks for that .
am obviously aware of the 325000 allowance but was not aware of the residential nrb element .
would like to think solicitor would be-but i equally like to be ahead of the game-'manage the manager',so thanks again.

i can look it up ,but property value is ironically about the £325,000 figure so i am not sure if that 'halts' the use of any RNRB or whether that additional £175000 allowance can be offset against cash assets .

The RNRB is in addition to the NRB, This estate should have a total exemption of £975k (2xNRB + RNRB + most of the transferable NRB). The home would need to be worth £350k to claim the entire transferable NRB.

Even if there is no IHT to pay you will need to do a full IHT return. If you want to get the estate wrapped up quicker and with less cost, avoid using a solicitor and DIY it instead. It may seem daunting but it is within the capabilities of most lay people to do and you can get lots of help over on the deaths, funerals and probate board.

If IHT is still payable in this estate you should be able to get it paid before you obtain probate. Banks will release quite large sums to the administrators before probate is obtained, but even if the liquid assets are locked up in a financial institution that requires probate it is possible to get that institution to pay HMRC directly using the direct payment scheme.

https://www.gov.uk/paying-inheritance-tax/deceaseds-bank-account#:~:text=This%20is%20called%20the%20%27Direct,Inheritance%20Tax%20payment%20reference%20number.