Intestacy, Joint Tenants & IHT Liabilities?

Keep_pedalling

gjcody said:

Keep_pedalling said:

gjcody said:

No, I am not talking nonsense, as I asked earlier; where did you read law?

I have no legal qualifications, but that applies to most of the regulars on this board we have learned through our own experiences and pass that knowledge on to others.

If you are a professional you should read rule 4 of the forum rules before posting.

Whilst she may be entitled to the Estate, nothing can be given away until the process of Probate is complete. Probate is required for all Intestate Estates; you cannot legally administer an Estate without the authority of the Probate Court.

I will say again in the case of a spouse this is nonsense. Some things have to be dealt with more urgently than that and such ridged rules would prevent you from disposing of the deceased car that  is illegally parked on a public road.

The IHT is irrelevant at this stage, and is not dealt with by the Probate Court? The Probate system merely authorizes an individual(s) to administer the Estate, to apply to the Land Registry to have property titles changed, to pay the deceased income tax, close their bank accounts,change a V5 at the DVLA, etc. The Chattels are not a lump sum and 50% of the household good must be attributed for the deceased IHT calculation, along with 50% of the family home given the Joint Tenancy. Early distribution is very much an issue; if the brothers take anything from the Estate they cannot claim to have a bean from it, what is it you do not understand about “disclaim”, if they take anything then the Intestate allocations will apply and they will have to pay the full amount of IHT!

It is common practice to lump the bulk of the chattels as one nominal some because the second hand value of most of these is going to be a pretty low value. I was also not talking about the OP disposing of any of this stuff but their mother has every right to do so. 

Any Executor who permits the releases of anything is in breach of their duties and personally legally and financially liable for any loss! Banks seldom release large sums without probate, particularly High Street banks, many only agree to cover funeral expenses.

Barclays released my mother’s savings of over £20k to me within 24 hours of me providing a copy of her will and proof of ID. It may be different for a professional administrator or someone not closely related to the deceased, but there are plenty of other cases on here where money has been released without fuss or undue delay.

No, the marital home is not 'covered' as it is a Joint property, with no Will, that others (the brothers) have a possible claim to, that share must be added to the IHT calculation; here is the extract for the website I point to, which you have clearly not read:

The children have no claim on the marital home it is not part of the inheritable estate.

“Joint tenants

You automatically inherit anything you owned as ‘joint tenants’.

You may have to pay Inheritance Tax if the whole of the deceased’s estate (all their money, property and possessions) is worth more than the Inheritance Tax threshold of £325,000 and the deceased’s estate does not pay.”

In this case it exceeds the threshold, by some amount. If the brothers disclaim of course everything falls under Spousal Exemption and no IHT will be due, which is rather the point of my post!

The last point is not relevant in this case even if the siblings claim their inheritance under intestacy rules the amount they will get is way under the NRB so nothing will be payable. The surviving spouse’s estate will have less in the way off exemptions but will also have less in the way of assets so overall there will be little or no impact on the eventual IHT liability of her estate whether the children take their share or pass it to their mother via a DoV.

I think this whole debate about chattels 

No, you don't have any qualification, that has been apparent throughout your posts. Passing on erroneous information does who any good?

As I said, I am not a professional, I retired over a decade ago. Hence my line that he sought advice from a current professional.

The case of the spouse is not nonsense, you clear are not grasping joint tenancy and intestate. The rules are rigid for a reason and many of what you call 'rules' are actually statuted law, Disclaiming for instance is covered by the 1984 Inheritance Act.

Common it may be in your mind, but HMRC require as near an accurate figure as the Executor can produce, along with the evidence to support his case. And they of course, as I pointed out are legally responsible for any loss, which includes taxes due to their negligence. This is one reason you can even insure yourself against such!

I don't see £20k are a large sum myself, and compared to the Estate of £1m it is a pittance. Though of course as you say, you had a Will which is sadly something that is lacking in this case, and it is that fact that is at the bottom of the whole issue, which is something you really are not grasping.

You are again missing the vital point, despite my posting the extract from the Joint Property page; the trouble arises if they do not included the monetary value of the property in the figures of the deceased possession, which you are convinced they don't need to some some odd reason; this will cause the IHT fight to be incorrect and therefore any tax levied on the Estate to be wrong, when, as the aforementioned document says “You may have to pay” IHT.

I suggest you spend sometime reading the HMRC Inheritance Tax Manual before you dispense advice that could cost people dearly.

I know I said I would not reply again but I can’t just let this go unanswered as I don’t believe you understand what I was trying to say.

As far as the joint property is concerned I agree, for IHT purposes 50% of the property needs to be included in the  gross and net IHT values, but excluded from probate valuations. Nothing needs to be reported to HMRC in this case because an IHT return is not required.

In this particular case it does not matter if the estate is distributed as per intestacy rules or the children let everything go to their mother the estate pays no IHT, so nothing that has been said on this thread is going to cause cost anyone dearly as you put it. 

gjcody

Keep_pedalling said:

gjcody said:

Keep_pedalling said:

gjcody said:

No, I am not talking nonsense, as I asked earlier; where did you read law?

I have no legal qualifications, but that applies to most of the regulars on this board we have learned through our own experiences and pass that knowledge on to others.

If you are a professional you should read rule 4 of the forum rules before posting.

Whilst she may be entitled to the Estate, nothing can be given away until the process of Probate is complete. Probate is required for all Intestate Estates; you cannot legally administer an Estate without the authority of the Probate Court.

I will say again in the case of a spouse this is nonsense. Some things have to be dealt with more urgently than that and such ridged rules would prevent you from disposing of the deceased car that  is illegally parked on a public road.

The IHT is irrelevant at this stage, and is not dealt with by the Probate Court? The Probate system merely authorizes an individual(s) to administer the Estate, to apply to the Land Registry to have property titles changed, to pay the deceased income tax, close their bank accounts,change a V5 at the DVLA, etc. The Chattels are not a lump sum and 50% of the household good must be attributed for the deceased IHT calculation, along with 50% of the family home given the Joint Tenancy. Early distribution is very much an issue; if the brothers take anything from the Estate they cannot claim to have a bean from it, what is it you do not understand about “disclaim”, if they take anything then the Intestate allocations will apply and they will have to pay the full amount of IHT!

It is common practice to lump the bulk of the chattels as one nominal some because the second hand value of most of these is going to be a pretty low value. I was also not talking about the OP disposing of any of this stuff but their mother has every right to do so. 

Any Executor who permits the releases of anything is in breach of their duties and personally legally and financially liable for any loss! Banks seldom release large sums without probate, particularly High Street banks, many only agree to cover funeral expenses.

Barclays released my mother’s savings of over £20k to me within 24 hours of me providing a copy of her will and proof of ID. It may be different for a professional administrator or someone not closely related to the deceased, but there are plenty of other cases on here where money has been released without fuss or undue delay.

No, the marital home is not 'covered' as it is a Joint property, with no Will, that others (the brothers) have a possible claim to, that share must be added to the IHT calculation; here is the extract for the website I point to, which you have clearly not read:

The children have no claim on the marital home it is not part of the inheritable estate.

“Joint tenants

You automatically inherit anything you owned as ‘joint tenants’.

You may have to pay Inheritance Tax if the whole of the deceased’s estate (all their money, property and possessions) is worth more than the Inheritance Tax threshold of £325,000 and the deceased’s estate does not pay.”

In this case it exceeds the threshold, by some amount. If the brothers disclaim of course everything falls under Spousal Exemption and no IHT will be due, which is rather the point of my post!

The last point is not relevant in this case even if the siblings claim their inheritance under intestacy rules the amount they will get is way under the NRB so nothing will be payable. The surviving spouse’s estate will have less in the way off exemptions but will also have less in the way of assets so overall there will be little or no impact on the eventual IHT liability of her estate whether the children take their share or pass it to their mother via a DoV.

I think this whole debate about chattels 

No, you don't have any qualification, that has been apparent throughout your posts. Passing on erroneous information does who any good?

As I said, I am not a professional, I retired over a decade ago. Hence my line that he sought advice from a current professional.

The case of the spouse is not nonsense, you clear are not grasping joint tenancy and intestate. The rules are rigid for a reason and many of what you call 'rules' are actually statuted law, Disclaiming for instance is covered by the 1984 Inheritance Act.

Common it may be in your mind, but HMRC require as near an accurate figure as the Executor can produce, along with the evidence to support his case. And they of course, as I pointed out are legally responsible for any loss, which includes taxes due to their negligence. This is one reason you can even insure yourself against such!

I don't see £20k are a large sum myself, and compared to the Estate of £1m it is a pittance. Though of course as you say, you had a Will which is sadly something that is lacking in this case, and it is that fact that is at the bottom of the whole issue, which is something you really are not grasping.

You are again missing the vital point, despite my posting the extract from the Joint Property page; the trouble arises if they do not included the monetary value of the property in the figures of the deceased possession, which you are convinced they don't need to some some odd reason; this will cause the IHT fight to be incorrect and therefore any tax levied on the Estate to be wrong, when, as the aforementioned document says “You may have to pay” IHT.

I suggest you spend sometime reading the HMRC Inheritance Tax Manual before you dispense advice that could cost people dearly.

I know I said I would not reply again but I can’t just let this go unanswered as I don’t believe you understand what I was trying to say.

As far as the joint property is concerned I agree, for IHT purposes 50% of the property needs to be included in the  gross and net IHT values, but excluded from probate valuations. Nothing needs to be reported to HMRC in this case because an IHT return is not required.

In this particular case it does not matter if the estate is distributed as per intestacy rules or the children let everything go to their mother the estate pays no IHT, so nothing that has been said on this thread is going to cause cost anyone dearly as you put it. 

I am not sure you understand what you are trying to say?!

The value submitted for probate is the base to work out if IHT is required, they can be dissimilar as they are estimated values, they cannot be 100% as it is the Grant of Probate to legally allows the Executor and hands him the legal responsibility to poke under every stone, trawl through 7 years of bank statement for Gifts, etc. He may find £400 in an coat pocket from the last time the man went to the races, which I am sure HMRC would accept as an oversight, but £225k in a building he grew up in would I am certain make alarms bells ring. The first figure submitted with the Probate paperwork will dictate if IHT may be due, if the Estate is excepted and suddenly another huge amount of money is discovered don't you think that would raise suspicion? The Court and HMRC do communicate on the values, and the HMRC will be aware that a property is owned and how it is held. It has been their address for sometime I would guess and he is doubtless registered their for tax purposes.

No it does matter, as I showed in the maths yesterday, the choice is basically IHT of £180k or Zero with all the allowances passing to the Widow for use when she dies giving her £1m tax-free, plus time to time to mitigate sums over that by Gifting, Trusts, etc.

EasySolution

@gjcody What is this "Disclaim" that you are recommending?

Keep_pedalling

gjcody said:

Keep_pedalling said:

gjcody said:

Keep_pedalling said:

gjcody said:

No, I am not talking nonsense, as I asked earlier; where did you read law? 

I have no legal qualifications, but that applies to most of the regulars on this board we have learned through our own experiences and pass that knowledge on to others.

If you are a professional you should read rule 4 of the forum rules before posting.

Whilst she may be entitled to the Estate, nothing can be given away until the process of Probate is complete. Probate is required for all Intestate Estates; you cannot legally administer an Estate without the authority of the Probate Court.

I will say again in the case of a spouse this is nonsense. Some things have to be dealt with more urgently than that and such ridged rules would prevent you from disposing of the deceased car that  is illegally parked on a public road.

The IHT is irrelevant at this stage, and is not dealt with by the Probate Court? The Probate system merely authorizes an individual(s) to administer the Estate, to apply to the Land Registry to have property titles changed, to pay the deceased income tax, close their bank accounts,change a V5 at the DVLA, etc. The Chattels are not a lump sum and 50% of the household good must be attributed for the deceased IHT calculation, along with 50% of the family home given the Joint Tenancy. Early distribution is very much an issue; if the brothers take anything from the Estate they cannot claim to have a bean from it, what is it you do not understand about “disclaim”, if they take anything then the Intestate allocations will apply and they will have to pay the full amount of IHT!

It is common practice to lump the bulk of the chattels as one nominal some because the second hand value of most of these is going to be a pretty low value. I was also not talking about the OP disposing of any of this stuff but their mother has every right to do so. 

Any Executor who permits the releases of anything is in breach of their duties and personally legally and financially liable for any loss! Banks seldom release large sums without probate, particularly High Street banks, many only agree to cover funeral expenses. 

Barclays released my mother’s savings of over £20k to me within 24 hours of me providing a copy of her will and proof of ID. It may be different for a professional administrator or someone not closely related to the deceased, but there are plenty of other cases on here where money has been released without fuss or undue delay.

No, the marital home is not 'covered' as it is a Joint property, with no Will, that others (the brothers) have a possible claim to, that share must be added to the IHT calculation; here is the extract for the website I point to, which you have clearly not read:

The children have no claim on the marital home it is not part of the inheritable estate.

“Joint tenants

You automatically inherit anything you owned as ‘joint tenants’.

You may have to pay Inheritance Tax if the whole of the deceased’s estate (all their money, property and possessions) is worth more than the Inheritance Tax threshold of £325,000 and the deceased’s estate does not pay.”

In this case it exceeds the threshold, by some amount. If the brothers disclaim of course everything falls under Spousal Exemption and no IHT will be due, which is rather the point of my post!

The last point is not relevant in this case even if the siblings claim their inheritance under intestacy rules the amount they will get is way under the NRB so nothing will be payable. The surviving spouse’s estate will have less in the way off exemptions but will also have less in the way of assets so overall there will be little or no impact on the eventual IHT liability of her estate whether the children take their share or pass it to their mother via a DoV.

I think this whole debate about chattels 

No, you don't have any qualification, that has been apparent throughout your posts. Passing on erroneous information does who any good?

As I said, I am not a professional, I retired over a decade ago. Hence my line that he sought advice from a current professional.

The case of the spouse is not nonsense, you clear are not grasping joint tenancy and intestate. The rules are rigid for a reason and many of what you call 'rules' are actually statuted law, Disclaiming for instance is covered by the 1984 Inheritance Act.

Common it may be in your mind, but HMRC require as near an accurate figure as the Executor can produce, along with the evidence to support his case. And they of course, as I pointed out are legally responsible for any loss, which includes taxes due to their negligence. This is one reason you can even insure yourself against such!

I don't see £20k are a large sum myself, and compared to the Estate of £1m it is a pittance. Though of course as you say, you had a Will which is sadly something that is lacking in this case, and it is that fact that is at the bottom of the whole issue, which is something you really are not grasping.

You are again missing the vital point, despite my posting the extract from the Joint Property page; the trouble arises if they do not included the monetary value of the property in the figures of the deceased possession, which you are convinced they don't need to some some odd reason; this will cause the IHT fight to be incorrect and therefore any tax levied on the Estate to be wrong, when, as the aforementioned document says “You may have to pay” IHT.

I suggest you spend sometime reading the HMRC Inheritance Tax Manual before you dispense advice that could cost people dearly.

I know I said I would not reply again but I can’t just let this go unanswered as I don’t believe you understand what I was trying to say.

As far as the joint property is concerned I agree, for IHT purposes 50% of the property needs to be included in the  gross and net IHT values, but excluded from probate valuations. Nothing needs to be reported to HMRC in this case because an IHT return is not required.

In this particular case it does not matter if the estate is distributed as per intestacy rules or the children let everything go to their mother the estate pays no IHT, so nothing that has been said on this thread is going to cause cost anyone dearly as you put it. 

I am not sure you understand what you are trying to say?!

The value submitted for probate is the base to work out if IHT is required, they can be dissimilar as they are estimated values, they cannot be 100% as it is the Grant of Probate to legally allows the Executor and hands him the legal responsibility to poke under every stone, trawl through 7 years of bank statement for Gifts, etc. He may find £400 in an coat pocket from the last time the man went to the races, which I am sure HMRC would accept as an oversight, but £225k in a building he grew up in would I am certain make alarms bells ring. The first figure submitted with the Probate paperwork will dictate if IHT may be due, if the Estate is excepted and suddenly another huge amount of money is discovered don't you think that would raise suspicion? The Court and HMRC do communicate on the values, and the HMRC will be aware that a property is owned and how it is held. It has been their address for sometime I would guess and he is doubtless registered their for tax purposes.

No it does matter, as I showed in the maths yesterday, the choice is basically IHT of £180k or Zero with all the allowances passing to the Widow for use when she dies giving her £1m tax-free, plus time to time to mitigate sums over that by Gifting, Trusts, etc.

These were the numbers you provided yesterday.  

The calculation for the Estate incl 50% of Joint Tenancy Property is 775000, minus IHT Allowance of 325000 = 450000 @ 40% 180000. This is calculated with no consideration of Gifts in the last 7 years, deductible expenses such as the funeral, etc.  I can think of no other Allowances that could be applied, rental properties are not liable for Business Relief.

That calculation is however incorrect.

Of the 775k the share of the house passes to the spouse by survivorship and because of spousal exemption uses up none of his NRB. This leaves an inheritable estate of £550k. £322k plus 50% of the remainder of this passes to the spouse under intestacy and again is covered by spousal exemption so still no NRB used up. This leaves £114k that passes to the children, way below the NRB so no IHT to be paid. 

You seem to have failed to take spousal exemption into account at all. 

NorthYorkie

This is an entertaining, if somewhat acrimonious, thread which has gone off on an irrelevant tangent about chattels! Apart from his or her initial post, Woodbine has not bothered to respond to any of the questions raised, so it's really not worth anyone's time to bother to post any response.

Daniel54

@North Yorkie Now or in the future there will be others who find or come across this thread,so it is still important to get things right.In this case I find myself in full agreement with K-p

gjcody

EasySolution said:

@gjcody What is this "Disclaim" that you are recommending?

In a nutshell when a beneficiary refuses to accept anything from a Will.  

Keep_pedalling

Yes, sorry about being one of the main protagonist in sending this off on a tangent but hopefully that is the end of it.

SadCodeMan

Given we have gone off tangent, it is probably not too awful to stay that way.

I just want to say that I have alway found your posts to be both extremely helpful and very knowledgeable @Keep_pedalling and I, personally find the comments above about you to be extremely rude and off the mark.

I think others on the forum will agree.

I will just add that you have 16 posts @gjcody (mostly on this thread) and despite the high opinion you have of your professional status, your posts don't really back up that position.

@Keep_pedalling has 21,791 posts and, although you may well find 16 of them are far of the mark, 21 odd thousand of them are very very helpful indeed.


 

 

mybestattempt

Keep_pedalling said:

Yes, sorry about being one of the main protagonist in sending this off on a tangent but hopefully that is the end of it.

It wasn't you who sent it off on a tangent and as I agree with your analysis I believe you quite rightly pointed out the errors made in other posts.