Family member refuses to complete IHT403

Keep_pedalling

hullensien said:

Keep_pedalling said:

hullensien said:

Brie said:

Is the recipient of the gifts also a beneficiary of the will?  I would then point out to them that the gifts received, being part of the estate, will be taken into account when paying out anything owed.

Sorry for your and your OH's loss.  And sorry that a family member is making things more difficult than they have to be.  

Hi - thanks for your support
 They are not beneficiaries. the problem is without info we can’t complete the IHT403 - should i refer them to probate or the HMRC?

You can’t compel them to give you this information, but if you know exactly what was given away it should not be too difficult to come up with an estimation of the value of these items.

Could you answer the question about his marital status please? Aslo did he own a house either in France or when he moved back to the UK?  

Hi - he was divorced in 2008 and then she died in 2011. He was in a care home in france but he had a legal guardian put in place to look after his affairs - she put the house up for sale to pay for his care home fees - these were paid and the residue transferred to his UK account. The house was sold before he came back to the UK - he lived with his daughter so didn’t own a property or any other tangible assets other than what was gifted when he was in France

Thanks, even though the house was in France and it was sold to pay for his care, I am pretty sure if you need it you can claim his RNRB which could avoid the need to pay any IHT although to claim it you still need to file a full IHT return including IHT 403.

Assuming the total value of the gifts are nowhere near £325k, one approach you could take is to speak to these family members to reassure them that they have no personal liability for any IHT but you need in inventory or of gifts so that you can establish the IHT due on the residual estate. Of cause IHT may not be the only reason they are being secretive as they seemed to have received large value gifts from a vulnerable man which may have been given under duress rather than freely.

hullensien

Keep_pedalling said:

hullensien said:

Keep_pedalling said:

hullensien said:

Brie said:

Is the recipient of the gifts also a beneficiary of the will?  I would then point out to them that the gifts received, being part of the estate, will be taken into account when paying out anything owed.

Sorry for your and your OH's loss.  And sorry that a family member is making things more difficult than they have to be.  

Hi - thanks for your support
 They are not beneficiaries. the problem is without info we can’t complete the IHT403 - should i refer them to probate or the HMRC?

You can’t compel them to give you this information, but if you know exactly what was given away it should not be too difficult to come up with an estimation of the value of these items.

Could you answer the question about his marital status please? Aslo did he own a house either in France or when he moved back to the UK?  

Hi - he was divorced in 2008 and then she died in 2011. He was in a care home in france but he had a legal guardian put in place to look after his affairs - she put the house up for sale to pay for his care home fees - these were paid and the residue transferred to his UK account. The house was sold before he came back to the UK - he lived with his daughter so didn’t own a property or any other tangible assets other than what was gifted when he was in France

Thanks, even though the house was in France and it was sold to pay for his care, I am pretty sure if you need it you can claim his RNRB which could avoid the need to pay any IHT although to claim it you still need to file a full IHT return including IHT 403.

Assuming the total value of the gifts are nowhere near £325k, one approach you could take is to speak to these family members to reassure them that they have no personal liability for any IHT but you need in inventory or of gifts so that you can establish the IHT due on the residual estate. Of cause IHT may not be the only reason they are being secretive as they seemed to have received large value gifts from a vulnerable man which may have been given under duress rather than freely.

Unfortunately the vulnerability is one of the issues. The 2 people in question are 2 of his 3 daughters - in the words of one of them “we marched him down to the notary”  The care home became concerned and a court appointed guardian was put in place and any powers they previously had - including bank mandates - were stripped from them. one of the conditions of him being allowed to return to live in the UK was that he had an accountant appointed to look after his affairs after what the french guardian quoted as “misunderstandings with the sisters”
We will get nowhere with them  - one of them has already put a caveat on the probate application - and that was even before probate was applied for - they weren’t even aware that there was a new will or who made the probate application. Hopefully probate will see that as abuse of process and they will get slapped down. i’ll just do a best estimate of the values and hopefully keep it below £325k - if we get pulled up I will explain the situation to probate. We were not made aware of the gifting issue until after we filed the original application.
Not sure the RNRB works but the house was sold prior to the makin g of his will so the will is basically just cash

SadCodeMan

I think the RNRB will depend on what his domocile was when he died. Up until I was involved in this, I would have thought the issue of domocile was absolutely cut and dry and simple but I was very wrong about that!
If he was domociled in the UK, I think he would get the RNRB (even though the house sold) I think.
If he was (still? If ever?) domociled in France (or other non UK) then I think he would not.

sheslookinhot

Could the gifts simply be ignored ?

hullensien

SadCodeMan said:

I think the RNRB will depend on what his domocile was when he died. Up until I was involved in this, I would have thought the issue of domocile was absolutely cut and dry and simple but I was very wrong about that!
If he was domociled in the UK, I think he would get the RNRB (even though the house sold) I think.
If he was (still? If ever?) domociled in France (or other non UK) then I think he would not.

thanks - we have a copy of a letter from the french court discharging his guardian because they no longer had any jurisdiction over him

hullensien

sheslookinhot said:

Could the gifts simply be ignored 

we could ignore them - and that’s what i would be tempted to do - but that wouldn’t be right and the executor would carry the can would she not?

Keep_pedalling

sheslookinhot said:

Could the gifts simply be ignored ?

Not unless the executor wants to dump themselves in a load of trouble with HMRC. It would be quite easy to get away with this as no cash changed hands and it happened in France, but one of the recipients of this ‘gifts’ is threatening to challenge the will so the the risk of discovery is not so low.

hullensien

Keep_pedalling said:

sheslookinhot said:

Could the gifts simply be ignored ?

Not unless the executor wants to dump themselves in a load of trouble with HMRC. It would be quite easy to get away with this as no cash changed hands and it happened in France, but one of the recipients of this ‘gifts’ is threatening to challenge the will so the the risk of discovery is not so low.

i think if the caveator continues to push it with probate they will be the ones in trouble. No grounds to lodge the caveat as far as i am concerned.
At the point they lodged the caveat probate hadn’t been applied for.
They didn’t know who had made the probate application so couldn’t object on those grounds
Until they received a response to the caveat they didn’t know there was a new will and therefore who was the executor.
They have no knowledge of and details of the will  - contents, dates, beneficiaries etc - so can’t object on those grounds either
One of their letters basically states “ if you you don’t give me a copy of the will I’m not removing the caveat”

We just wan’t bto do the right thing and add the value of the gifts to the estate

Keep_pedalling

hullensien said:

Keep_pedalling said:

sheslookinhot said:

Could the gifts simply be ignored ?

Not unless the executor wants to dump themselves in a load of trouble with HMRC. It would be quite easy to get away with this as no cash changed hands and it happened in France, but one of the recipients of this ‘gifts’ is threatening to challenge the will so the the risk of discovery is not so low.

i think if the caveator continues to push it with probate they will be the ones in trouble. No grounds to lodge the caveat as far as i am concerned.
At the point they lodged the caveat probate hadn’t been applied for.
They didn’t know who had made the probate application so couldn’t object on those grounds
Until they received a response to the caveat they didn’t know there was a new will and therefore who was the executor.
They have no knowledge of and details of the will  - contents, dates, beneficiaries etc - so can’t object on those grounds either
One of their letters basically states “ if you you don’t give me a copy of the will I’m not removing the caveat”

We just wan’t bto do the right thing and add the value of the gifts to the estate

I was responding to the suggestion that you could ‘forget’ the gifts when declaring the value of the estate, which you are obviously not trying to do. Advising an executor to forget them is dangerous advice which could lead to a criminal prosecution if followed. 

Unfortunately anyone can submit a caveat to a will and there is no punishment for doing so frivolously. 

poseidon1

I feel I should introduced the issue of whether or not the father was really UK domiciled for IHT purposes at the time he made the overseas gifts, bearing in mind he appears to have been abroad as far back as 2008 ( if not earlier).

The fact the father was made ro return 'involuntarily' to the UK where he eventually died, does not affect whether he had excercised a firm  and irrevocable decision to change his UK tax domicile of origin (at birth) to a new foreign domicile of choice (France), if when originally moving to France he had no intention of ever returning to the UK. Please note given up his UK passport is not a conditional requirement to changing ones tax domicile.

The concept of tax 'domicile' in this regard has a precise meaning for legal purposes, unconnected to its ordinary english language definition, and therefore unlikely something you or your partner will be familiar with when making submissions to HMRC.

The  blog below  gives a reasonable outline of how  a UK domiciled person can go about changing their UK domicile, and despite its rather jocular tone has the advantage of being reasonably approachable for someone not versed in tax law

https://taxscouts.com/the-tax-basics/how-does-domicile-of-choice-work/


Having regard to the above, if the  father's  actions subsequent to his original departure abroad meets the criteria of someone with a firm intention to give up his UK domicile of origin ( for tax purposes), in favour of a French domicile of choice,  I would certainly try to contend all gifts of chattels he made while living abroad, were outside the scope of UK IHT on death, because he was not UK tax domiciled ( for IHT purposes) at the time the gifts occurred. 

Those gifts may or may not have foreign gift/wealth tax implications at the time they were made, but that is certainly not something that concerns your partner at the moment 

This is a very archane and complex area of tax law and practice, outside the experience and competency of the average solicitor. 

If your partner wants to explore how best to make submissions to HMRC  on this basis she will need to consult a STEP qualified solicitor with specific competency in non dom, cross border tax planning matters.
I would add that the Labour government has implemented changes to the domicile and residence tax rules in April, effective for deaths occuring after 5 April 2025, so this may introduce further complexity. 

Nonetheless I suspect if a legal adviser can make a convinving case that  the overseas gifts fall out of the scope  of UK IHT , your partner's  task will be made immeasurably easier.