Probate/Inheritance Tax = another question

Guy1960

I and my sister have recently been granted probate with estate valued at £750000

We should be free of inheritance tax with 2 x £325000 plus 1 x £175000

I was under impression that probate would not be granted without say so from HMRC, is that right

Listened to the Martin Lewis Show last week and they seemed to suggest need to reclaim unused spouse for first £325000 within 2 years of 2nd death, is that correct? Its not automatic to get the allowance ? 

Hoenir

Guy1960 said:

I was under impression that probate would not be granted without say so from HMRC, is that right

Have you applied for probate in the correct manner?  If you don't know what you are doing. Seek professional advice. Executorship is a legal duty that needs to be performed with diligence. 

Keep_pedalling

Well either you made an error on the probate form or someone in the probate office failed to notice this was not an excepted estate, what values did you use on the probate application?

Guy1960

Keep_pedalling said:

Well either you made an error on the probate form or someone in the probate office failed to notice this was not an excepted estate, what values did you use on the probate application?

I advised that value of estate was £750000 and that has been put as the probate valuation on the grant of probate form

Keep_pedalling

Guy1960 said:

Keep_pedalling said:

Well either you made an error on the probate form or someone in the probate office failed to notice this was not an excepted estate, what values did you use on the probate application?

I advised that value of estate was £750000 and that has been put as the probate valuation on the grant of probate form

What did you put at value for IHT purposes? I presume you ticked the yes option for Q7.4 (claiming transferable NRB)  even though it says only answer the question if the estate is between £325k & £650k, but it looks like the probate office failed to pick up on your error in not filling in IHT return.

The residential NRB has to be claimed and that can only be done by through the submission of an IHT return, so if you don’t correct this you are likely to find yourself being pursued by HMRC further down the line for payment of IHT and a fine for late payment. so you need to sort this ASAP. Call the probate office and inform them of the problem. They are likely to revoke the grant and you will have to start again.

msb1234

It sounds to me like you haven’t actually completed the IHT application but just gone straight to the Probate application. 

Guy1960

msb1234 said:

It sounds to me like you haven’t actually completed the IHT application but just gone straight to the Probate application. 

Have spoken to probate office and they suggested to send forms to HMRC and see what happens.  Got a feeling probate will be revoked and will have to start process again.  Not the end of the world I suppose, in our case need to sell house which is rented out but cant do this until the lease expires at the end of this year.