Net qualifying estate value for IHT

rjay

I am doing IHT and Probate for my Mum, as her husband (my step-dad) died recently.

There was no will.

I've calculated estate as being £107k cash and a one-third share of a £300k house which he co-owned with my Mum. So that's £107k I've entered as Gross value for probate and £207k (£107k + £100k) which I've entered as Gross estate value for IHT.

Minus funeral expenses equals £102,500 as Net value for probate and £202,500 as Net estate value for IHT.

Because there is no will, I am confused as to what figure I should put as 'Net qualifying estate value for IHT'. Instructions says "Starting with the net value above, take away the total value of any assets passed to a spouse or civil partner" but there is no will and I'm unsure of what will automatically be passed. 

So, in this case, is Net qualifying estate value for IHT the same as Net estate value for IHT ?

Keep_pedalling

If he only owned 1/3rd of the house they must have been tenants in common making his share heritable and it should  be included in the probate value.

If your step father had no children of his own his entire estate passes to your mother, but even if he did everything under £270k passed to a surviving spouse so again the whole estate goes to her.

rjay

The Land Registry form has the 3rd box ticked on the "Declaration of Trust" section which reads "they are to hold the property on trust" then it goes onto give the % I stated. Is that the same thing as tenants in common ?

Keep_pedalling

rjay said:

The Land Registry form has the 3rd box ticked on the "Declaration of Trust" section which reads "they are to hold the property on trust" then it goes onto give the % I stated. Is that the same thing as tenants in common ?

Yes, you can’t hold unequal shares as joint tenants only TiC.

rjay

Ok, so they were tenants in common, which means my late step-fathers 1/3rd share will pass to my mother under intestancy rules along with the rest of the estate because it totals less than £270k. You said Net value for probate should infact be the same as Net estate value for IHT, which is noted.

But the original question remains: in this case, is Net qualifying estate value for IHT the same as Net estate value for IHT ?

buddy9

Because the whole estate passes to the surviving spouse the net qualifying value is zero.

rjay

buddy9 said:

Because the whole estate passes to the surviving spouse the net qualifying value is zero.

Ahh right, yes, that's an explanation I can now understand. Thankyou.