Daughter left 50% of property what is inheritance tax liability

rose28454

My brother died last year midst divorce. He left his estate to his daughter as he had made a settlement with his wife ( although it hadn’t gone through as he died soon after ) 
So the property was owned as tenants in common so his half will go to his daughter. The daughters inheritance will be worth about £364000 after all debts are paid which includes 1/2 of the house worth to her £101000.
Will she be liable to inheritance tax bearing in mind part of the 364000 is the 101000 fir the house
many thanks 

RAS

The basic is that as a (still) married person, he had an IHT allowance of £325k and a residential allowance of £175k providing that property or it's value was left to a descendant.

The complication is that the other part of the ownership is his ex-wife's, presumably his daughter's mother? How old is the daughter?

Brie

The estate pays the inheritance tax, if any, not the beneficiaries.

rose28454

RAS said:

The basic is that as a (still) married person, he had an IHT allowance of £325k and a residential allowance of £175k providing that property or it's value was left to a descendant.

The complication is that the other part of the ownership is his ex-wife's, presumably his daughter's mother? How old is the daughter?

She is 19 years old. 

RAS

OK, who are the executors? And how was the will worded? 

rose28454

RAS said:

OK, who are the executors? And how was the will worded? 

RAS said:

OK, who are the executors? And how was the will worded? 

The executors are my sister and the beneficiary. It was worded that he left all his assets to the daughter ( on the presumption that he had settled with the wife ) 

msb1234

This may not be as straightforward as you think. If a financial order has not yet been completed as part of the divorce, then the ex wife may still be entitled to some of his estate, especially if he also had a pension. So that will need to be sorted out first before any inheritance is paid out. 

Savvy_Sue

msb1234 said:

This may not be as straightforward as you think. If a financial order has not yet been completed as part of the divorce, then the ex wife may still be entitled to some of his estate, especially if he also had a pension. So that will need to be sorted out first before any inheritance is paid out. 

I've been wondering that since the first post, just didn't know how to word it. I would get advice on that - not asking a solicitor to take over probate, just to advise on the mechanics of it all! 

rose28454

Things have moved along now. The wife is now back living in the house and paying most of the mortgage ( dayghter has agreed to pay a small amount even though she lives away most of the time) which is obviously fine as she owns half .  Nearly ready for probate now. The partnership he had with his wife is being sold off by her but she acknowledges 1/2 is her daughters. ( should generate about £120000 but there will be tax to pay due to capital right down 

There is a limited company with him as director which is being liquidated as it’s broke ( I am the interim director in order to facilitate that ) 
Then he had about 60k of personal assets ( a digger motor bikes etc ) which are being gradually being sold to get money together to pay the debts. Both of my sisters are owed substantial sums ( 35k and 10k ) and a friend us owed 10k. There is also the mortgage which is 249000 and a business loan if 18k ( from another business  he his wife and 2 other partners owned ) 
this business is generating an income of about 1750 per month for the wife and daughter ( hers is being held in thr executors account ) and if they wanted to sell they would get 250000 each for their share. 
The house is worth about 500000 and the mortgage is interest only ( with no payment vehicle ) and ends in 6 years. 

There is about 180000 of tax debt ( some personal and some for the limited company . 

So in essence the executors and solicitor thinks the personal and business debts should be shouldered by the wife and daughter in equal shares which will potentially leave just the house ( still mortgaged ) and the 4 way partnership as assets. 

Our fear is however that the wife will put pressure on the daughter to sign over more of thr estate to her as she is 58 and says she can’t work ( although she runs a diet business , does gym work and is a masseur )
Right after he died we as a family said we would carry out the financial agreement they had signed even though it was not legally binding which would have meant the house and all business being sold and she would get 400000 and her daughter would shoulder all the debts. But she said no as she thinks we are cheating her but all we want is his daughter to get what he wanted her to have . Now she will obviously get less and she is behaving really badly in how she is breaking up his life’s work and she will only speak to my sister the  executor ( who to be honest doesn’t care about the estate and is messing it up big time 
question is can the wife fight for more ? 

Marcon

rose28454 said:

Things have moved along now. The wife is now back living in the house and paying most of the mortgage ( dayghter has agreed to pay a small amount even though she lives away most of the time) which is obviously fine as she owns half .  Nearly ready for probate now. The partnership he had with his wife is being sold off by her but she acknowledges 1/2 is her daughters. ( should generate about £120000 but there will be tax to pay due to capital right down 

There is a limited company with him as director which is being liquidated as it’s broke ( I am the interim director in order to facilitate that ) 
Then he had about 60k of personal assets ( a digger motor bikes etc ) which are being gradually being sold to get money together to pay the debts. Both of my sisters are owed substantial sums ( 35k and 10k ) and a friend us owed 10k. There is also the mortgage which is 249000 and a business loan if 18k ( from another business  he his wife and 2 other partners owned ) 
this business is generating an income of about 1750 per month for the wife and daughter ( hers is being held in thr executors account ) and if they wanted to sell they would get 250000 each for their share. 
The house is worth about 500000 and the mortgage is interest only ( with no payment vehicle ) and ends in 6 years. 

There is about 180000 of tax debt ( some personal and some for the limited company . 

So in essence the executors and solicitor thinks the personal and business debts should be shouldered by the wife and daughter in equal shares which will potentially leave just the house ( still mortgaged ) and the 4 way partnership as assets. 

Our fear is however that the wife will put pressure on the daughter to sign over more of thr estate to her as she is 58 and says she can’t work ( although she runs a diet business , does gym work and is a masseur )
Right after he died we as a family said we would carry out the financial agreement they had signed even though it was not legally binding which would have meant the house and all business being sold and she would get 400000 and her daughter would shoulder all the debts. But she said no as she thinks we are cheating her but all we want is his daughter to get what he wanted her to have . Now she will obviously get less and she is behaving really badly in how she is breaking up his life’s work and she will only speak to my sister the  executor ( who to be honest doesn’t care about the estate and is messing it up big time 
question is can the wife fight for more ? 

Anyone can fight for anything. Whether they succeed is another matter entirely.

There seems to be rather a lot of emotion here on all sides, when a cool head and some clear, factual advice from a trusted source might defuse the situation before any more aggro builds up. '....all we want is his daughter to get what he wanted her to have' is a perfectly reasonable sentiment, but given the timing of his death, that's not as straightforward as it might otherwise have been - and clearly the wife doesn't see it in a favourable light.

Perhaps stop being critical of your sister, who is a key player here, and see if she can persuade the wife to put in writing exactly where she feels she is being 'cheated' and why. It is always easier to respond to a precise set of facts/accusations/complaints than a vague 'I feel hard done by'. 

'Breaking up his life's work' is an understandable reaction, but that may be the reality of what needs to happen - and that sentiment is at odds with your statement that you only want the daughter to get what he wanted her to have.

Tough comments, I know, especially in the wake of the death of a loved one - but they might be your best hope.

rose28454

Marcon said:

rose28454 said:

Things have moved along now. The wife is now back living in the house and paying most of the mortgage ( dayghter has agreed to pay a small amount even though she lives away most of the time) which is obviously fine as she owns half .  Nearly ready for probate now. The partnership he had with his wife is being sold off by her but she acknowledges 1/2 is her daughters. ( should generate about £120000 but there will be tax to pay due to capital right down 

There is a limited company with him as director which is being liquidated as it’s broke ( I am the interim director in order to facilitate that ) 
Then he had about 60k of personal assets ( a digger motor bikes etc ) which are being gradually being sold to get money together to pay the debts. Both of my sisters are owed substantial sums ( 35k and 10k ) and a friend us owed 10k. There is also the mortgage which is 249000 and a business loan if 18k ( from another business  he his wife and 2 other partners owned ) 
this business is generating an income of about 1750 per month for the wife and daughter ( hers is being held in thr executors account ) and if they wanted to sell they would get 250000 each for their share. 
The house is worth about 500000 and the mortgage is interest only ( with no payment vehicle ) and ends in 6 years. 

There is about 180000 of tax debt ( some personal and some for the limited company . 

So in essence the executors and solicitor thinks the personal and business debts should be shouldered by the wife and daughter in equal shares which will potentially leave just the house ( still mortgaged ) and the 4 way partnership as assets. 

Our fear is however that the wife will put pressure on the daughter to sign over more of thr estate to her as she is 58 and says she can’t work ( although she runs a diet business , does gym work and is a masseur )
Right after he died we as a family said we would carry out the financial agreement they had signed even though it was not legally binding which would have meant the house and all business being sold and she would get 400000 and her daughter would shoulder all the debts. But she said no as she thinks we are cheating her but all we want is his daughter to get what he wanted her to have . Now she will obviously get less and she is behaving really badly in how she is breaking up his life’s work and she will only speak to my sister the  executor ( who to be honest doesn’t care about the estate and is messing it up big time 
question is can the wife fight for more ? 

Anyone can fight for anything. Whether they succeed is another matter entirely.

There seems to be rather a lot of emotion here on all sides, when a cool head and some clear, factual advice from a trusted source might defuse the situation before any more aggro builds up. '....all we want is his daughter to get what he wanted her to have' is a perfectly reasonable sentiment, but given the timing of his death, that's not as straightforward as it might otherwise have been - and clearly the wife doesn't see it in a favourable light.

Perhaps stop being critical of your sister, who is a key player here, and see if she can persuade the wife to put in writing exactly where she feels she is being 'cheated' and why. It is always easier to respond to a precise set of facts/accusations/complaints than a vague 'I feel hard done by'. 

'Breaking up his life's work' is an understandable reaction, but that may be the reality of what needs to happen - and that sentiment is at odds with your statement that you only want the daughter to get what he wanted her to have.

Tough comments, I know, especially in the wake of the death of a loved one - but they might be your best hope.

Thanks for your reply. And although the comments are touch I can see where your coming from. 

The remark about my sister is actually justified as that sister was the closest to my brother so she was made executor but didn’t and doesn’t want the job. She has her own business but is very nonchalant about paperwork and has made multiple mistakes ( ( this weeks was that I have to be a signatory on the ltd company and I found out even though she went to the bank in December she didn’t bother showing them the death certificate even though she had it with her so his death wasn’t registered ) 
You can give someone a power of attorney as an executor to someone if you can’t manage the task and basically that’s what I am. 

The remark about life’s work is that he was very loyal to his staff and she treated them badly by dispensing with their services asap even though the business were / are still running and therefore god knows what sort of mess financially with tax etc will be left . My brother had been ill for about a year and the divorce had taken its toll and his office manager had basically run the business’s and knew them inside out 

I am doing all the paperwork and I have multiple files on the go ( I love financial and computer stuff ) and most of the time I am very sensible and level headed about the whole thing. It’s very sad but he did make a Wlll so we feel duty bound to carry it out to the best of our ability. 

None of us want our sister in law to have nothjng and basically she will get half after the debts but we’ve been told by various people not to trust her as she seems like a lovely person but only cares about herself 

for example the day he died we knew in the morning and his daughter even had a call with the end of life nurse at the start of the day. My sisters and I and his partner were there all day and he passed at 6.30pm. None of us thought why has his daughter not arrived - because her mother we t to the business premise to reassure the staff, went into the house that she hadn’t lived in for 6 years looking for money ( he always kept cash at home ) and let her daughter catch the train which was an hours train ride then she called her when she was on the train and told her he was dead!!   

Who does that to their child. 

Anyway sentiment aside I am doing some accounts for the estate this weekend in order to get probate applied for 
thanks for your reply