Help progressing probate

longwalks1

Currently helping a close friends son apply for probate/letters of administration after my friend passed suddenly, and didnt have a will. 
There was a delay waiting for proof of his divorce from 16 years ago, and we thought probate was being progressed now we had it.  I'm helping my friends son (he's 28) apply as me and my partner completed probate and IHT400 etc on our own last year for my late MIL.  
Probate have emailed back with the following exact wording, which has left us a bit stumped.  can anyone please advise:


Thank you for your email.
1) to enable your application to proceed, please submit a new figure to show any charity/spouse exemptions.  Alternatively, please complete IHT217 form, if you are claiming the unused nil rate band.

Please answer:
Did the deceased have a late spouse or civil partner?  Yes/No.  (we will answer NO)

Are you claiming the unused IHT allowance ('nil rate band') of the deceased's late spouse or civil partner?  Yes/No  (we will answer NO)

If no exemption applies, please complete an IHT400, IHT421 and any supplementary forms and submit to HMRC.
Please also forward a copy of IHT421 probate summary to contactprobate@justice.gov.uk
Please send these forms to HM Revenue & Customs to ensure that your probate application can proceed as quickly as possible.

RAS

What's the value of the estate?

Does it or did it include a house? Even if sold to cover care costs?

If so, who will inherit the value of the house?

Assuming from your post that the deceased did not re-marry?

Keep_pedalling

If the estate exceeds £325k then he will need to submit a full IHT return. There will be no IHT due if the estate is under £500k but the return needs to be done in order to claim the residential NRB.

longwalks1

RAS said:

What's the value of the estate?

Does it or did it include a house? Even if sold to cover care costs?

If so, who will inherit the value of the house?

Assuming from your post that the deceased did not re-marry?

Sorry RAS I missed lots of information off my original post.
value of estate: house £325,000.  Life insurance policy £50,000.  Total: £375,000. (Assuming pensions aren’t part of this? There are 3 small pensions totalling £70,000) 

There were no care costs, he died suddenly in December 2023.

the estate will be split equally between his 2 sons.  I only refer to one son as he’s doing all the paperwork and admin.
deceased did not remarry.

thanks again 

longwalks1

Keep_pedalling said:

If the estate exceeds £325k then he will need to submit a full IHT return. There will be no IHT due if the estate is under £500k but the return needs to be done in order to claim the residential NRB.

Thank you Keep_pedalling, we’ve had a year and a half of probate and IHT and it’s confusing us as we keep remembering parts we did for the MIL application.  Makes sense now
thanks again 

RAS

Was the life insurance paid out to the beneficiaries?

longwalks1

RAS said:

Was the life insurance paid out to the beneficiaries?

Hello RAS - yes the life insurance has been paid out to the 2 sons. it was approx £42000 in total

RAS

In which case, I don't think that it counts as part of the estate for IHT purposes.

Do double check.

Keep_pedalling

RAS said:

In which case, I don't think that it counts as part of the estate for IHT purposes.

Do double check.

I would agree, otherwise they would not pay out without probate.

If that is correct then an IHT return should not be required, however that house valuation is bang on the NRB and there must have been a few other assets such as chattels and money in bank accounts that could tip it into needing one (unless he was a widower)

How was the house valued? 

longwalks1

Keep_pedalling said:

I would agree, otherwise they would not pay out without probate.

If that is correct then an IHT return should not be required, however that house valuation is bang on the NRB and there must have been a few other assets such as chattels and money in bank accounts that could tip it into needing one (unless he was a widower)

How was the house valued? 

Thank you again both.  Keep_pedalling, there was minimal money in a bank account (£800) and very little value in the house contents
Im sure the house valuation was a local estate agent viewed it and said it was what they'd expect to market the property at.  I see what you are saying, had it been £10k under, then definately no IHT400 needed, but right on the NRB may raise questions

Keep_pedalling

longwalks1 said:

Keep_pedalling said:

I would agree, otherwise they would not pay out without probate.

If that is correct then an IHT return should not be required, however that house valuation is bang on the NRB and there must have been a few other assets such as chattels and money in bank accounts that could tip it into needing one (unless he was a widower)

How was the house valued? 

Thank you again both.  Keep_pedalling, there was minimal money in a bank account (£800) and very little value in the house contents
Im sure the house valuation was a local estate agent viewed it and said it was what they'd expect to market the property at.  I see what you are saying, had it been £10k under, then definately no IHT400 needed, but right on the NRB may raise questions

The funeral costs would have bean more than the other assets so those don’t need to be taken into account. I would worry that the EA has come up with that figure just to keep it out of IHT territory, if it actually sells for more than that then CGT or I.hT may need to be paid. Was he a widower? If he was then the problem goes away with the transferable NRB.