Balloon Payments and IHT

shell18

Hello,

Deceased had car on finance. Outstanding finance at date of death was 5753.70 PLUS a balloon payment of 12786 so total 18539.

On the IHT liabilities do you state outstanding finance including the balloon payment? Chat gpt and google say yes but I wanted to check with you brainy bunch.

Many thanks

Keep_pedalling

A balloon payment is an optional payment so I think it depends on what action the executor took with regards on whether to keep the car or hand it back.

shell18

https://forums.moneysavingexpert.com/discussion/comment/81877204#Comment_81877204

Sole Beneficiary took over the finance. BUT everything I have seen about IHT is that you have to use what the position was at the date of death, not what happens after.

poseidon1

https://forums.moneysavingexpert.com/discussion/comment/81877218#Comment_81877218

As long as you insert the full market value of the car ( at death) as an asset on the IHT form, then inserting the ballon payment as a counterbalancing estate debt, will give you the net value of the car for IHT purposes.

If this does not produce a net surplus value for the car ( rather than a deficit) it's fiscally questionable whether the beneficiary should have taken over the contract rather than handing the car back. However that is a matter separate and distinct from the correct treatment for IHT/Probate reporting purposes as indicated above.