A Multitude of IHT Questions

wyattjnr

Hello everyone, I am hoping I can get some advice here as I am completely lost in the whole process of probate.
So my mother passed in June 2024, I am the 50/50 beneficiary to my mums estate alongside my sister.  My mother had been in a care home in Ireland (all assets in UK) since 2020 and had no property (all cash and investments).  We have started probate through her solicitor and as a start have instructed them to do a bank search for my mum, although we think we have all her accounts, but just want to check.  We have also asked for one to be done on my grandma as her probate has still not been completed from 2021 and that money is due to my mother and therefore now my sister and me.
In total my mothers assets are in excess of £800k and are all cash, no property.  She was divorced from my father in 2019 and so there is no allowance passing over to him. Its the standard £325k.  Therefore we are in line for a very very substantial IHT bill at the end of December.  Whilst I don't agree with IHT, I do realise we legally have to pay it, but I would like to minimise this amount as much as possible.  Could people explain the options to us of reducing the IHT (not even sure its possible, but as I say I am completely lost in this).  My mother has mad gifts to both my sister and I previously for deposits for houses and flats but they were so long ago, there are no records of the transactions. Would these count?
Also, the quote from the solicitor to undertake the probate is in excess of £7k, is this fair?   Could people let me know if DIY probate is straightforward or not?

Thanks in advance.

p00hsticks

wyattjnr said:

   Could people let me know if DIY probate is straightforward or not?

That very much depends on how straightforward the estate is - in your case it sounds like your grandmother's estate will need to be dealt with before your mothers can be finalised. Who is/was the executor for your grandmothers estate and who is it for your mother ? Did both leave wills ?

If the lifetime gifts to you and your sister were over seven years ago then they'll fall outside your mothers estate. 

wyattjnr

p00hsticks said:

wyattjnr said:

   Could people let me know if DIY probate is straightforward or not?

That very much depends on how straightforward the estate is - in your case it sounds like your grandmother's estate will need to be dealt with before your mothers can be finalised. Who is/was the executor for your grandmothers estate and who is it for your mother ? Did both leave wills ?

If the lifetime gifts to you and your sister were over seven years ago then they'll fall outside your mothers estate. 

Thanks for the quick response.  So, my mother and her brother were executors of my grandmothers will, however due to my mum not being of fit mind it feel solely to my uncle.  For my mother its me and my sister. Both parties left wills.
So it sounds to me there isn't any way of reducing the IHT in this case.

RAS

Did mum ever own property this side of the water?

wyattjnr

RAS said:

Did mum ever own property this side of the water?

Yes she and my dad owned a property in Hampshire until it was sold in 2019 and they split the proceeds at divorce

RAS

Ok, think you need advice on this, as it's just possible you could claim the Residential Nil Rate. Someone who was a home owner who sold to downsize or go into care would get up to £175k allowance, depending on the value of the property sold. There may be other circumstances when they could claim this.

Keep_pedalling

Sorry answer questions with more questions but was she a resident of the RoI or NI? If the former then her estate falls under the laws of the RoI which complicates things somewhat.

You say gifts were long ago so no records, but if there were in the last 7 years then they do form part of her estate and not declaring them would be a serious offence and could result in serious penalties including jail time. 

wyattjnr

RAS said:

Ok, think you need advice on this, as it's just possible you could claim the Residential Nil Rate. Someone who was a home owner who sold to downsize or go into care would get up to £175k allowance, depending on the value of the property sold. There may be other circumstances when they could claim this.

I think it has to be in the last 2-3 years for that allowance to help, so could be too late.

wyattjnr

Keep_pedalling said:

Sorry answer questions with more questions but was she a resident of the RoI or NI? If the former then her estate falls under the laws of the RoI which complicates things somewhat.

You say gifts were long ago so no records, but if there were in the last 7 years then they do form part of her estate and not declaring them would be a serious offence and could result in serious penalties including jail time. 

No, she was a resident of the UK still.
No the gifts were all years ago.

Keep_pedalling

wyattjnr said:

RAS said:

Ok, think you need advice on this, as it's just possible you could claim the Residential Nil Rate. Someone who was a home owner who sold to downsize or go into care would get up to £175k allowance, depending on the value of the property sold. There may be other circumstances when they could claim this.

I think it has to be in the last 2-3 years for that allowance to help, so could be too late.

No, as long as it was after the 5th April 2017 (the RNRB came into effect on 6th of that month) it can still be claimed.

p00hsticks

wyattjnr said:

Keep_pedalling said:

Sorry answer questions with more questions but was she a resident of the RoI or NI? If the former then her estate falls under the laws of the RoI which complicates things somewhat.

You say gifts were long ago so no records, but if there were in the last 7 years then they do form part of her estate and not declaring them would be a serious offence and could result in serious penalties including jail time. 

No the gifts were all years ago.

Exactly how many years though - it makes a difference ? More or less than seven at the date of her death is the key figure.

If, as you say, she gave the money for house deposits for you then it should be easy enough to track back - when did you and your sister buy the properties on question ?