Everything Done Now What?

Russianbar

Hi, I've just completed the sale of my late father's house and am ready to distribute funds to beneficiaries, at the time of me applying for and getting probate I was told that the estate would not be subject to inheritance tax the value of the estate came to around £340,000 (as it turns out it is less because the house sold for far less than the value entered when applying for probate) but using my late mother's allowance was well within limits. My question is, is there anything else for me to do before distributing the funds? Are there any other forms to fill online to give the exact figures now everything is done and dusted or are the figures I provided at application for probate enough? I would like everything to be tied up 100% before someone in government decides to change the Inheritance Tax rules and limits

tls123

A quick call to the probate office should set your mind at ease but I believe the only problem with the probate value is where you paid IHT but the property sold for a much lower amount meaning you may have overpaid IHT. I would also make sure you have a record of the estate accounts so you can demonstrate amounts to the beneficiaries etc. 

warrenb

That is basically it, I made a quick call to HMRC to make sure all was well there (which it turned out wasn't as a small amount of tax was owed from previous years), paid this from estate and completed the accounts and sent a copy to all of the beneficiaries.
And yes it does feel a bit weird that there is no official form to fill to say what you have done.

Sarahspangles

Russianbar said:

Hi, I've just completed the sale of my late father's house and am ready to distribute funds to beneficiaries, at the time of me applying for and getting probate I was told that the estate would not be subject to inheritance tax the value of the estate came to around £340,000 (as it turns out it is less because the house sold for far less than the value entered when applying for probate) but using my late mother's allowance was well within limits. My question is, is there anything else for me to do before distributing the funds? Are there any other forms to fill online to give the exact figures now everything is done and dusted or are the figures I provided at application for probate enough? I would like everything to be tied up 100% before someone in government decides to change the Inheritance Tax rules and limits

We drafted the Estate Accounts broadly following the headings in the link. This prompted us to tidy up some minor stuff like paying tax on savings and issuing form R185s, before calling the accounts final. There was nothing to report to Government services apart from the small amounts of tax. We have used the accounts since for ‘what happened about…’ questions and they’re there if there is some form of investigation (very unlikely).

https://www.co-oplegalservices.co.uk/media-centre/articles-sept-dec-2018/what-are-estate-accounts/

thegreenone

tls123 said:

A quick call to the probate office should set your mind at ease but I believe the only problem with the probate value is where you paid IHT but the property sold for a much lower amount meaning you may have overpaid IHT. I would also make sure you have a record of the estate accounts so you can demonstrate amounts to the beneficiaries etc. 

Please reread the OPs post.  They didn't pay IHT.

OP if you are the residual beneficiary you don't need to show the accounts to anyone.  I understand beneficiaries can ask but you do not need to show them.  I wouldn't have shown my late Mum's accounts to anyone - no-one needed to know the numbers and how much I inherited.  Go ahead and distribute.

Linton

thegreenone said:

tls123 said:

A quick call to the probate office should set your mind at ease but I believe the only problem with the probate value is where you paid IHT but the property sold for a much lower amount meaning you may have overpaid IHT. I would also make sure you have a record of the estate accounts so you can demonstrate amounts to the beneficiaries etc. 

Please reread the OPs post.  They didn't pay IHT.

OP if you are the residual beneficiary you don't need to show the accounts to anyone.  I understand beneficiaries can ask but you do not need to show them.  I wouldn't have shown my late Mum's accounts to anyone - no-one needed to know the numbers and how much I inherited.  Go ahead and distribute.

It is only the residual beneficiaries who should see the accounts.  Those who were left specific amounts do not.

muchembe

One other thing is maybe if your Father held any assets like shares that could have generated some income since he died. In that case there's a procedure for reporting this detailed on the gov.uk guidance https://www.gov.uk/probate-estate/reporting-the-estate . My Dad had some money with Fidelity which I think counts, as it is in various stocks & shares based accounts, so I'm going to do the 'simple' letter report on that.

Otherwise I'd just recommend you keep a fairly clear record of the estate accounts & who gets what when you distribute. Well done for getting to this point btw. I can appreciate it could feel strange after what can seem like an overwhelming mix of things to do while your emotions are all over the place.

thegreenone

Linton said:

thegreenone said:

tls123 said:

A quick call to the probate office should set your mind at ease but I believe the only problem with the probate value is where you paid IHT but the property sold for a much lower amount meaning you may have overpaid IHT. I would also make sure you have a record of the estate accounts so you can demonstrate amounts to the beneficiaries etc. 

Please reread the OPs post.  They didn't pay IHT.

OP if you are the residual beneficiary you don't need to show the accounts to anyone.  I understand beneficiaries can ask but you do not need to show them.  I wouldn't have shown my late Mum's accounts to anyone - no-one needed to know the numbers and how much I inherited.  Go ahead and distribute.

It is only the residual beneficiaries who should see the accounts.  Those who were left specific amounts do not.

That's what I said.

Rhubarbium

That works fine mathematically. I showed the loaned money in the total value of the estate and then in the balance of the distribution. I.e child one got £20k cash and £20k loan previously given and child two got £40k cash.

Keep_pedalling

Was this a gift or a loan? If it was a gift the estate needs to be split 4 ways with no adjustment for the gift.

If it was a loan then yes what your sister has proposed will clear the debt and correctly distribute the estate. The loan needs to appear on the accounts as a debt owed to the estate. 

Unless this is a documented loan or your brother confirms it was a loan then I think you have to except it was a gift. 

bobster2

Russianbar said:

Thanks for everyones very useful and informative replies, I have a small problem which I hope you can also help me with the estate is to be divided between the 4 beneficiaries (4 children of my father including myself) one of the beneficiaries recieved an amount of money from my father before he passed my father made it plain to my sister that it should be deducted from his inheritance (it was around 10k). My sister has suggested the remaining three should each take this amount from the estate and then divide what is left between the 4 of us, is this the correct way of doing it and how should I show it in any estate accounts?

In line with what @Keep_pedalling has said...

Unless you have clear evidence this was a loan - then this is not the correct way of doing things.

If it was a loan - then you include this amount as part of the estate (as money owed to the estate). Each beneficiary is then entitled to 25% of the estate but the loan recipient then receives 25% - £10k.

So for example if the value of the estate is £190k + £10k loan = £200k then 3 beneficiaries get £50k and the one with the loan gets £40k.

If this was not a loan - the all 4 beneficiaries get £47.5k