Probate Registry requesting additional info ??? Seeking advice. RNRB

captrico

Had this email from probate the other week. I filed online a month or so ago and wasnt sure if i had made an error when filing.  Heres the text:

Thank you for your application. In order for us to progress your application further, please confirm the following information by replying by email to contactprobate@justice.gov.uk:

Your application states you have not submitted IHT forms to HMRC to report the value of the estate. The Gross value of the estate you have submitted is above the excepted estate limit of £325,000 and you have answered ‘No’ to the question are you claiming unused Nil rate band. You have not claimed any other exemptions.

As the gross value of the estate exceeds £325,000 and there are no exemptions to claim you will need to report the value of the estate to HMRC. Please complete an IHT400 and submit to HMRC. Form IHT400 can be downloaded from:
https://www.gov.uk/valuing-estate-of-someone-who-died/estimate-estate-value

I was under the impression that i was allowed 500K threshold 325k & 175k (residence nil rate band) because the house was left to myself and my brother. (My mothers will)

I reported an estate value of 365,000 which was the house value and her savings combined.  Im sure i read that no IHT400 was needed if the estate does not qualify for tax.  The application online .gov site didnt ask about applying the RNRB anywhere so i assumed it was just added in.  I have written back to them explaining that i wanted to use a RNRB but have not heard back anything. 

Anyone familiar with the application process?  Im well under the 500k so what are they getting at?   

poppystar

If you are wanting to use RNRB then you have to complete a full tax return, IHT 400 plus all relevant schedules which will include the IHT435 to claim the residential element. 

captrico

poppystar said:

If you are wanting to use RNRB then you have to complete a full tax return, IHT 400 plus all relevant schedules which will include the IHT435 to claim the residential element. 

Would it be easier to use my fathers unused Nil Rate band? He died a year ago and my mother never filed probate as they were married. Im trying to minimize the complexity of the thing. Its just a house and savings. 

poppystar

Yes, there should have been a question on the probate application to that effect. If father left nothing to anyone but your mother that would give you £650k to use. Did you keep a copy of your application? If so check how you answered that question then, if you didn’t say ‘yes’ it was an excepted estate, get back to Probate and say you answered that question incorrectly. 

Keep_pedalling

Tcaptrico said:

poppystar said:

If you are wanting to use RNRB then you have to complete a full tax return, IHT 400 plus all relevant schedules which will include the IHT435 to claim the residential element. 

Would it be easier to use my father’s unused Nil Rate band? He died a year ago and my mother never filed probate as they were married. Im trying to minimize the complexity of the thing. It’s just a house and savings. 

Absolutely, no IHT return required if you don’t have to claim either RNRB.

p00hsticks

poppystar said:

Yes, there should have been a question on the probate application to that effect. If father left nothing to anyone but your mother that would give you £650k to use. Did you keep a copy of your application? If so check how you answered that question then, if you didn’t say ‘yes’ it was an excepted estate, get back to Probate and say you answered that question incorrectly. 

I think that is the problem - from the OP

captrico said:

 The Gross value of the estate you have submitted is above the excepted estate limit of £325,000 and you have answered ‘No’ to the question are you claiming unused Nil rate band. 

captrico

Heres what i answered.  I said NO to the unused nil rate (my fathers). I think i should have said YES.   But there was no probate or anything done when he died.  When you put YES , do they just take your word for it?  There was no questions or anything regarding him or his name, etc. so i put NO incase they wanted a bunch of paperwork about his will and he didnt really have one.  It all went to my mother as she was the legal wife.     They also never asked about the property value and her savings. Just estate net value.  How in the future if the house is sold will they determine what the house was worth then vs what it sells for later?  For Capital gains tax reasons.  The probate application online really doesn't ask much other than estate value.  Will they ask for a detailed breakdown later on?  

poppystar

yup, that’s where you should have said yes. It doesn’t matter that your fathers estate didn’t go to probate. I assume they can check his death certificate themselves. Beyond that there don’t seem to be checks now. Ditto house value, which makes it much better if it does go for more. The CGT form would ask for the value at date of death at that point so keep your own records of the valuation in case you should be asked. I’d email Probate next week and explain that you were confused and I’m sure they will be able to amend your answer to the transfer of allowance question. 

captrico

This is what i wrote in reply to their request for information.  As of yet i have had no reply, so maybe they amended it or maybe they have shelved the application for a non rainy day.  I will call Tuesday and see what they need, but their email did say i need to contact them via email if i made a mistake.  

captrico

poppystar said:

yup, that’s where you should have said yes. It doesn’t matter that your fathers estate didn’t go to probate. I assume they can check his death certificate themselves. Beyond that there don’t seem to be checks now. Ditto house value, which makes it much better if it does go for more. The CGT form would ask for the value at date of death at that point so keep your own records of the valuation in case you should be asked. I’d email Probate next week and explain that you were confused and I’m sure they will be able to amend your answer to the transfer of allowance question. 

Ok, good.  I had a look at the IH400 and I402 and it was a nightmare of questions. Hopefully i dont need to go anywhere near that mess.  I think my situation is fairly basic for probate.  I used the higher end of the house value (estate agent said 250-300k so went 275k incase it sells in 3 years and prices go way up. In reality it is probably 250 at best currently.

Keep_pedalling

captrico said:

poppystar said:

yup, that’s where you should have said yes. It doesn’t matter that your fathers estate didn’t go to probate. I assume they can check his death certificate themselves. Beyond that there don’t seem to be checks now. Ditto house value, which makes it much better if it does go for more. The CGT form would ask for the value at date of death at that point so keep your own records of the valuation in case you should be asked. I’d email Probate next week and explain that you were confused and I’m sure they will be able to amend your answer to the transfer of allowance question. 

Ok, good.  I had a look at the IH400 and I402 and it was a nightmare of questions. Hopefully i dont need to go anywhere near that mess.  I think my situation is fairly basic for probate.  I used the higher end of the house value (estate agent said 250-300k so went 275k incase it sells in 3 years and prices go way up. In reality it is probably 250 at best currently.

Safer to go with the top end of the estimate as far as CGT is concerned.