Inheritance Tax

Iambamboozled

poseidon1 said:

Keep_pedalling said:

poseidon1 said:

If despite the 'dodgy will' your mother died unmarried and intestate then you first consider what nil rate bands she has available.

She has a house so in theory she has £325k + £175k as long as the house is worth £175k or more, so a total of £500k

Under strict intestacy rules you and siblings are your mother's sole heirs and as such no IHT at all on the £475k.

Now you don't want to lose any part of the Residence NiL Rate Band, so the way to structure the 50:50 agreement is for this to take effect after letters administration obtain by the PR, so that this becomes a post probate private agreement be

Definitely do not give up the 50% share by way of a deed of variation of mother's intestacy,  since that jeopardises part of the RNRB if the house value is the lion's share of her £475k estate - the step father does not meet the criteria for RNRB if his 50% comprises part of the property value.

As she died 5 years ago a deed of variation is not possible.

Well spotted! 

Therefore no question with regard to inadvertently losing the RNRB via a DOV. Only issue is whether she legally  died intestate or not, which should be a question of fact rather than interpretation.

We've done all the arguments/objections over the will, intestacy, etc,, with caveats and all of that stopping either side from doing probate. All that was left was to force it to court or come to an agreement. The latter is now where we are at. 

Iambamboozled

Keep_pedalling said:

Iambamboozled said:

Keep_pedalling said:

Iambamboozled said:

Keep_pedalling said:

Providing her house was worth at least £175k then her estate would be exempt from IHT as her administrators can claim her residential NRB taking her exemptions to £500k. You will however have to file a full IHT return to claim this.

Was this dodgy will actually valid? Had she signed it and has her signature witnessed by 2 witnesses? 

Thank you for taking the time to reply. I was pretty sure me and my siblings half would be exempt but I wasn't sure if my ex step father's would be. The property is the full value of the estate, my ex step father's other family have taken just about everything else.

The "Will" has more holes than a string vest.

Have you taken paid for legal advice? If the will is invalid then her estate is intestate and the scoundrel is entitled to nothing and you need to apply for letters of administration. 

If the will is being used to apply for probate, and he is the executor it is too late to do a deed of variation and nothing to stop him distributing it as per the will.

Many thousands so far. As I say we have been at stalemate - neither party can apply for probate - and that is why we have agreed a 50/50 split. He is entitled to nothing but if it went to court it would drag on even longer and would not be sensible for either party. We're not happy he is getting anything but sometimes you have to compromise and suck it up.

Surely the will is either valid or it is not, I can’t see how this can be in dispute. 

You would think so wouldn't you. But it is in dispute. Very long story indeed.

Keep_pedalling

Iambamboozled said:

Keep_pedalling said:

poseidon1 said:

If despite the 'dodgy will' your mother died unmarried and intestate then you first consider what nil rate bands she has available.

She has a house so in theory she has £325k + £175k as long as the house is worth £175k or more, so a total of £500k

Under strict intestacy rules you and siblings are your mother's sole heirs and as such no IHT at all on the £475k.

Now you don't want to lose any part of the Residence NiL Rate Band, so the way to structure the 50:50 agreement is for this to take effect after letters administration obtain by the PR, so that this becomes a post probate private agreement be

Definitely do not give up the 50% share by way of a deed of variation of mother's intestacy,  since that jeopardises part of the RNRB if the house value is the lion's share of her £475k estate - the step father does not meet the criteria for RNRB if his 50% comprises part of the property value.

As she died 5 years ago a deed of variation is not possible.

It's not five years until 13th May this year. Nevertheless it looks as if a post probate agreement is the way forward. I told our solicitor that because we reject the will absolutely, we want no acknowledgement of it in the agreement. I need to check that it is not a deed of variation. It's with a barrister at the moment.

Deeds of variation have to be done within 2 years of death. 

Iambamboozled

Keep_pedalling said:

Iambamboozled said:

Keep_pedalling said:

poseidon1 said:

If despite the 'dodgy will' your mother died unmarried and intestate then you first consider what nil rate bands she has available.

She has a house so in theory she has £325k + £175k as long as the house is worth £175k or more, so a total of £500k

Under strict intestacy rules you and siblings are your mother's sole heirs and as such no IHT at all on the £475k.

Now you don't want to lose any part of the Residence NiL Rate Band, so the way to structure the 50:50 agreement is for this to take effect after letters administration obtain by the PR, so that this becomes a post probate private agreement be

Definitely do not give up the 50% share by way of a deed of variation of mother's intestacy,  since that jeopardises part of the RNRB if the house value is the lion's share of her £475k estate - the step father does not meet the criteria for RNRB if his 50% comprises part of the property value.

As she died 5 years ago a deed of variation is not possible.

It's not five years until 13th May this year. Nevertheless it looks as if a post probate agreement is the way forward. I told our solicitor that because we reject the will absolutely, we want no acknowledgement of it in the agreement. I need to check that it is not a deed of variation. It's with a barrister at the moment.

Deeds of variation have to be done within 2 years of death. 

Good to know, thank you very much for all of your help.

poseidon1

Iambamboozled said:

Keep_pedalling said:

poseidon1 said:

If despite the 'dodgy will' your mother died unmarried and intestate then you first consider what nil rate bands she has available.

She has a house so in theory she has £325k + £175k as long as the house is worth £175k or more, so a total of £500k

Under strict intestacy rules you and siblings are your mother's sole heirs and as such no IHT at all on the £475k.

Now you don't want to lose any part of the Residence NiL Rate Band, so the way to structure the 50:50 agreement is for this to take effect after letters administration obtain by the PR, so that this becomes a post probate private agreement be

Definitely do not give up the 50% share by way of a deed of variation of mother's intestacy,  since that jeopardises part of the RNRB if the house value is the lion's share of her £475k estate - the step father does not meet the criteria for RNRB if his 50% comprises part of the property value.

As she died 5 years ago a deed of variation is not possible.

It's not five years until 13th May this year. Nevertheless it looks as if a post probate agreement is the way forward. I told our solicitor that because we reject the will absolutely, we want no acknowledgement of it in the agreement. I need to check that it is not a deed of variation. It's with a barrister at the moment.

If this matter has already escalated to a Barrister in Chambers referral, then unpalatable as it sounds agreeing a 50:50 split via an appropriate agreement seems to be the only way to avoid vast legal costs swallowing up the estate. 
Can understand you have no desire to share the gory details, but certainly  sounds like step dad is a  particularly unsavoury character.

Iambamboozled

poseidon1 said:

Iambamboozled said:

Keep_pedalling said:

poseidon1 said:

If despite the 'dodgy will' your mother died unmarried and intestate then you first consider what nil rate bands she has available.

She has a house so in theory she has £325k + £175k as long as the house is worth £175k or more, so a total of £500k

Under strict intestacy rules you and siblings are your mother's sole heirs and as such no IHT at all on the £475k.

Now you don't want to lose any part of the Residence NiL Rate Band, so the way to structure the 50:50 agreement is for this to take effect after letters administration obtain by the PR, so that this becomes a post probate private agreement be

Definitely do not give up the 50% share by way of a deed of variation of mother's intestacy,  since that jeopardises part of the RNRB if the house value is the lion's share of her £475k estate - the step father does not meet the criteria for RNRB if his 50% comprises part of the property value.

As she died 5 years ago a deed of variation is not possible.

It's not five years until 13th May this year. Nevertheless it looks as if a post probate agreement is the way forward. I told our solicitor that because we reject the will absolutely, we want no acknowledgement of it in the agreement. I need to check that it is not a deed of variation. It's with a barrister at the moment.

If this matter has already escalated to a Barrister in Chambers referral, then unpalatable as it sounds agreeing a 50:50 split via an appropriate agreement seems to be the only way to avoid vast legal costs swallowing up the estate. 
Can understand you have no desire to share the gory details, but certainly  sounds like step dad is a  particularly unsavoury character.

Strangely, as much as my siblings and I find it unpalatable, our friends, family, people who knew him, and even strangers such as yourself, find it even less palatable. I think we are just happy that my half brother, my ex step father's son (whom he has disgracefully disowned and had effectively disinherited) will finally benefit a little financially and that we will all be able to put the whole sorry business behind us. I have no words for my ex step father, what he has done and is doing to us, particularly as we lived as a family for so long and never gave him any cause. Thank you very much for all of your help.