State Pension - The money we owe

silvermum

ColinB said:

ColinB said:

Have just phoned HMRC's IHT Helpline, and got a slightly different story to those reported on the ACCA and LITRG websites. HMRC say they expect us to check whether the underpayment, if added to the estate valuation, would put the total over the IHT threshold. If it doesn't, they don't need to know. But if it does, then they expect to be informed, presumably so that they can levy IHT on the difference. Which means having to delve into the intricacies of the calculation from 4 years ago. Grrr. I might try calling again tomorrow to get a different agent and see if I get the same story.

So I phoned HMRC a second time, and got exactly the same response. That is, they expect the executors to check whether the windfall puts the estate value above the IHT threshold, and for them to be informed if it does. If it doesn't, they don't want to know.

That suggests the ACCA and LITRG websites are not correct. I've written to the latter pointing this out, but TBH I don't expect a reply. ACCA are difficult to contact unless you're a member. 

It's easier than I thought to do the check HMRC wants: if you look at the IHT400 that was submitted for probate, plug in a new value for the estate assets (get the value of the arrears from DWP), and follow the calculation through the various boxes you can get the indication you need. We're still OK, unless DWP have goofed again and the amount they want to give us is radically different from the amount they've told us verbally. 

That's interesting, if frustrating (to have to revisit the probate figures).

Can I ask how long it took to be told how much was owed? I sent the reply confirming I was the correct person to receive it a couple of weeks ago, and obviously I'm curious to find out how much it is!
Or did you ring them and ask?

ColinB

silvermum said:

Can I ask how long it took to be told how much was owed?  ... obviously I'm curious to find out how much it is! Or did you ring them and ask?

We rang them. If you ring the number on the letter, the call centre will just give you the number of the dept dealing with bereavements ... which is 0800 151 2012. You can ring that number directly and they'll tell you the amount straight away. Be aware they'll only talk to the person to whom they sent the letter. We were warned that they're working through a backlog and it may be some time before any payment arrives.  

silvermum

ColinB said:

silvermum said:

Can I ask how long it took to be told how much was owed?  ... obviously I'm curious to find out how much it is! Or did you ring them and ask?

We rang them. If you ring the number on the letter, the call centre will just give you the number of the dept dealing with bereavements ... which is 0800 151 2012. You can ring that number directly and they'll tell you the amount straight away. Be aware they'll only talk to the person to whom they sent the letter. We were warned that they're working through a backlog and it may be some time before any payment arrives.  

Thanks! I’ll give them a call tomorrow then.

silvermum

silvermum said:

ColinB said:

silvermum said:

Can I ask how long it took to be told how much was owed?  ... obviously I'm curious to find out how much it is! Or did you ring them and ask?

We rang them. If you ring the number on the letter, the call centre will just give you the number of the dept dealing with bereavements ... which is 0800 151 2012. You can ring that number directly and they'll tell you the amount straight away. Be aware they'll only talk to the person to whom they sent the letter. We were warned that they're working through a backlog and it may be some time before any payment arrives.  

Thanks! I’ll give them a call tomorrow then.

Well, I'm glad I called them! They have not received my form (sent in the envelope provided on 20 September). Apparently, they sent me a reminder on 27 September, which I haven't received!
Although I have a pdf copy of the documents I sent I can't email  them this as "we don't do email"  so I've had to entrust another copy to bloody Royal Mail again. Aargh!

Oh, and they couldn't tell me how much we're talking about as it 'hasn't been calculated yet'.

Honestly, I give up...

silvermum

Just an update on this, and a caution for anyone else getting their hopes up for a large windfall. I got the payment today and it was.......

£27.52

 

So cancel those plans for a cruise, or paying off your debts!

Honestly though, why are the DWP wasting time and resource (mine and theirs) over such small sums? Surely anything less than £50 should just be written off/given to charity?

ColinB

ColinB said:

ColinB said:

Have just phoned HMRC's IHT Helpline, and got a slightly different story to those reported on the ACCA and LITRG websites. HMRC say they expect us to check whether the underpayment, if added to the estate valuation, would put the total over the IHT threshold. If it doesn't, they don't need to know. But if it does, then they expect to be informed, presumably so that they can levy IHT on the difference. Which means having to delve into the intricacies of the calculation from 4 years ago. Grrr. I might try calling again tomorrow to get a different agent and see if I get the same story.

So I phoned HMRC a second time, and got exactly the same response. That is, they expect the executors to check whether the windfall puts the estate value above the IHT threshold, and for them to be informed if it does. If it doesn't, they don't want to know.

That suggests the ACCA and LITRG websites are not correct. I've written to the latter pointing this out, but TBH I don't expect a reply. ACCA are difficult to contact unless you're a member. 

LITRG have just got back to me saying that HMRC have amended their IHT manual (dated just last week), the relevant section is here:
https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm17600
Extract:

"Inheritance Tax issues 

It is possible that the person who has been underpaid their State Pension will have died before DWP make a payment of the arrears. The correct IHT treatment is set out below. 

If a person dies having received a payment of arrears, the payment will simply be reflected in their estate and IHT will arise on the estate as usual. 

When arrears are paid after the person’s death, but where DWP had not notified the person that any payment of arrears was due, then there is no value to be included in their estate. 

When arrears are paid after the person’s death, but while the person was still alive DWP had notified the person that they were entitled to a payment of arrears, then the right to the arrears was a valuable asset of the estate at the date of death. In these circumstances a discount of 5% of the value eventually received can be allowed to reflect the fact that the payment had not been made before the date of death. "

In other words, the HMRC "help"line was wrong and LITRG was correct. Apologies to anyone if my earlier post has caused any unnecessary worry.