Newbie - sole exectutor of parent's complex(ish) estate

2LeftFeet

Hi all

I have had a look through this really useful forum but am struggling to get things clear in my mind about what to do, when, and how…

Background
- my divorced parent sadly passed a few weeks ago
- I am sole executor and have the original copy of will
- the estate is well above the IHT threshold and largely comprised of illiquid assets, split equally between the property in which they lived and a stocks/shares portfolio (large amounts in a few US companies)
- cash available to pay ~10% of the IHT due hopefully via direct payment scheme (will be a significant 6 figure sum)
- the house was on the market so appraisal by local estate agent had been done recently (now off the market whilst I sort stuff out but will be sold in the future)
- I have made the necessary arrangements and notified key organisations (utilities, pensions, banks, brokers, unoccupied insurance for the house etc)
- I have opened a separate bank account to deal with expenses etc (not an executor account)
- based on other suggestions here I have started a spreadsheet to record what's been done, status/next steps, expenses etc

Question: what order do I do things now?
- Chattels: as far as I am aware, there is not much of value but the house is full of junk (empty boxes, miles of phone cables etc): can I start tidying up (ie getting rid of rubbish, junk, perishables, multiple mobility walkers of various colours) from the house now on the basis that nothing of value is being removed and do I need to keep records (eg photos) to this effect?
- should I get independent contents valuation for probate before doing anything?
- how do I get contents valued for probate - I live miles away so do I pick a name out of Google and arrange to meet a valuer there for us to jointly try to work out what "stuff" is worth?
- As I understand it I will need RICS property valuation - do I do this now or post-decluttering?
- Can I realistically persuade HMRC to allow me to pay a small proportion (eg 10%) of IHT to get probate, thereby allowing me to sell the stocks/shares to pay the rest of the IHT due
- Is there anything I can do about potentially significant market fluctuations in the stocks/shares between value at date of death (assuming this is what is declared to HMRC) and value at sale - could be more…or less?
- I know I am going to need some tax advice to wrap everything up - do I go for a combined tax expert / probate solicitor (thus putting the onus on the professional to get it all right) or try to combine expert tax advice + DIY probate (acting in good faith as a numerate lay-person)?

Thank you to anyone who has wisdom to share 🙏

Savvy_Sue

First question, who are the beneficiaries?

Because if you're sole beneficiary, only HMRC cares about values, and they may not care as much as you think. (Chattels, for example, mostly minimal value unless there's a collection of Old Masters or similar. Empty boxes and phone cables = £0.)

If all other beneficiaries are sensible adults, a pragmatic approach can be used.

If any beneficiaries are under 18, or charities, you may need to be slightly more cautious.

What we did with a cluttered house was get an auction house in. They would only take some of what they valued, but we had a total value. They recommended a clearance company, who then 'staged' the house for sale before final clearance.

I think we made a loss on the auction house (fee for valuation not covered by what we made at auction). But the clearance company were worth every single penny (and there were a lot of pennies in their final fee!)

Savvy_Sue

And a quick answer, yes, when there's a property to sell then HMRC allows you to pay 10% of the IHT due, and the rest in instalments. But they'll be charging interest.

Keep_pedalling

Just checking are you aware of the residential NRB that can tax the IHT exemptions up to £500k?

Cubicsrube

Re Chattels - Having been through the death admin four times, and full probate twice, in the last five years: estimating chattels need not be a big deal unless you believe that the deceased had some possessions (art, fine jewelry etc) of significant value. Everything is worth less than you think, and far, far, far less than they thought.

For my in-laws, disposing of stamp and coin collections going back over a century was a labour of love for my other half, as his dad was convinced they were worth a fortune, but the time and transport cost invested in taking them to dealers outweighed the sale value. A few bits of furniture had moderate value as they happened to be from a 'cool' era and those were claimed by one beneficiary. My partner used the dealer values and ebay comparables to arrive at a Chattels valuation, but this was mainly to satisfy the other beneficiary that these collections were not, in fact, worth a fortune. He sent a few boxes off to vintage cash cow, then the British Heart Foundation did the clearance (which cost more than anything in the house raised.)

My parents had less stuff - for them my sibling and I booked a day off, met at the property and went through everything, making boxes of sentimental items and taking some furniture to store for the next generation. We put a nominal value of £500 on the house contents for HMRC & probate. Everything else went to charity or the tip, and we left the flat sparsely furnished and staged ready for sale once probate came through (which took 6 months).

Albermarle

- Is there anything I can do about potentially significant market fluctuations in the stocks/shares between value at date of death (assuming this is what is declared to HMRC) and value at sale - could be more…or less?

Until you get probate then nothing you can do. Once you have probate you could sell the shares. Unless they are held in a Stocks and Shares ISA, the Capital Gains Tax would be payable on any profits made. So you would have to find out when they were bought and at what price.

 multiple mobility walkers of various colours)

The NHS are very bad at taking equipment bad, although improving. Our local tip/recycling facility has a specific drop off point for these items. I believe they are refurbished and donated to Third World countries.

As I understand it I will need RICS property valuation - do I do this now or post-decluttering?

I would not have thought a professional valuer would be affected by some clutter.

 I know I am going to need some tax advice to wrap everything up - do I go for a combined tax expert / probate solicitor (thus putting the onus on the professional to get it all right) or try to combine expert tax advice + DIY probate (acting in good faith as a numerate lay-person)?

It sounds like you should be OK to DIY and ask for adhoc professional help for specific situations.

Notepad_Phil

- Is there anything I can do about potentially significant market fluctuations in the stocks/shares between value at date of death (assuming this is what is declared to HMRC) and value at sale - could be more…or less?

Until you get probate then nothing you can do. Once you have probate you could sell the shares. Unless they are held in a Stocks and Shares ISA, the Capital Gains Tax would be payable on any profits made. So you would have to find out when they were bought and at what price.

Albermarle is right about nothing can be done until probate - but my understanding is that for cgt the price of shares etc held outside of a tax-exempt wrapper is reset to that at the time of death, not what they were bought at. So if the market improves then you might have some cgt to pay, but not as much as if they were bought many years ago

p00hsticks

Until you get probate then nothing you can do. Once you have probate you could sell the shares. Unless they are held in a Stocks and Shares ISA, the Capital Gains Tax would be payable on any profits made. So you would have to find out when they were bought and at what price.

I was under the impression that the CGT clock is effectively reset on death, to potentialyl be replaced by Inheritance tax ? The estate would potentially pay IHT on the value of the shares as at the death, which would be the value declared at probate.

So it; the value as at the date of death that is needed, not when they were originally bought and for what price.

CGT would then only be due on any rise in value between the date of death and when sold after probate is obtained.

Albermarle

@poohsticks123

@Notepad_Phil

I stand corrected !

Grumpy_chap

Chattels: as far as I am aware, there is not much of value but the house is full of junk (empty boxes, miles of phone cables etc): can I start tidying up (ie getting rid of rubbish, junk, perishables, multiple mobility walkers of various colours) from the house now on the basis that nothing of value is being removed and do I need to keep records (eg photos) to this effect?

Sorry for your loss.

For the vast majority of us the value of stuff we own is vanishingly close to zero. The exceptions would be items such as

• Jewellery
• Collectibles - coins, stamps, artwork...
• Antiques

Marcon

OP - have a look at https://www.gov.uk/probate-estate/managing-and-selling-assets

and

https://www.thegazette.co.uk/all-notices/content/320

Both have lots of information you might find useful.