Help - IHT forms needed?

Digs1975

Would appreciate your help and advice as my mind is overloaded with grief…

My mum has died, owned her own house, no Will, myself and sister. Mum was widowed. I am not sure if I need to complete any IHT forms or just head straight to apply for 'letters of administration'.

House I would estimate is worth 290-300k, other assets (including content of property, vehicle, any cash or money in bank) I estimate at 5k.

House - I have transferred utilities into my name, including broadband as I need to be at the house frequently. Insurance I swapped to uninhabited property and paid for the annual policy.

I am not worried about 'reclaiming' any of the bills from the Estate.

What will happen with the house is yet to be decided, however I am aware that legally it is 50/50 with sibling, although I understand we can decide on this at a later stage.

So my question - do I need to do any IHT forms as I am toatlly confused with 'excepted estate' - I think this is an excepted estate but would value help!

p00hsticks

I'm sorry for your loss.

With no will, you will need to apply for Letters of Administration.

Regarding IHT, there are a few questions ?

In which country was your mother resident ? (As the process and laws in England and Wales are different to Scotland)

Was your mother married to your father when he died and did she inherit everything from him ?

If so then she will also have inherited his Nil Rate Band allowance which means your mothers estate is well under IHT territory using just his and her NRBs, and I beleive you can go straight to applying for Letters of Adminstration.

If that's not the case, then there would also be no IHT tax to pay as there is an additional Residential Nil Rate band available to apply when the deceased property is left to descendants, but to claim that I believe you do have to compete the IHT forms in order to claim it, even if there is no IHT due, If you think this might be the case it would be worth getting a more accurate valuation of the house to see if the estate is actually over the £325k NRB or not as if not then there will be no need to claim the additional allowance.

Keep_pedalling

You will need to apply for letters of administration (LoA) in order to deal with the house, but you won’t need to do an IHT return as the estate is entirely within her £325k nil rate band.

LoA is the virtually the same process as probate which would be needed if there was a will. The process is different if she lived in Scotland where you need to apply for confirmation.

Digs1975

Thanks for reply. Answer to a few questions.

Residence was England. Mum and dad were married when he died.

Keep_pedalling

https://forums.moneysavingexpert.com/discussion/comment/81972914#Comment_81972914

If you mother inherited everything from your father her estate would actually need to be over £650k before an IHT return would be required so you a have plenty of leeway there.

Blessdays

Really sorry for your loss – I went through something very similar and know how overwhelming it can feel at the start.

From my experience, the key thing is not to panic about IHT straight away. In most straightforward estates like the one you’ve described, it often ends up being below the threshold anyway – especially if your dad passed before your mum, as there may be transferable allowances.

In my case, I initially thought I had to complete loads of IHT forms, but it turned out I didn’t need to do a full return. What I did need was to apply for Letters of Administration so I could deal with the property and everything else officially.

A couple of practical things that helped me:

• Get a rough but realistic valuation of the house (estate agent estimates are usually fine to start with)
• Make a simple list of assets and anything owed
• Don’t worry about small things like household bills you’ve covered – that can all be sorted later if needed
• Focus first on getting the legal authority (Letters of Administration), as that unlocks everything else

Also, just to reassure you – transferring utilities and sorting insurance like you’ve done is exactly what I did too. You’re already handling things sensibly.

If the total estate is around what you’ve said, there’s a good chance it will fall under the threshold and the process will be more straightforward than you’re expecting.

Take it one step at a time – it’s a process, not something you need to solve all at once.

Digs1975

Really appreciate all your kind words and help.

So glad that I made the post as has eased my mind.

I will start the ball rolling with the LoA.

RAS

For day to day running costs during the period before the LOA, banks etc can release money on sight of the death certificate and evidence of identity. Transfer it to a separate account in your name.

p00hsticks

Another tip - you haven't said what the intention is for the property - to live in or to sell. If the latter, and assuming that you have both mothers and fathers NRBs giving you a £650k allowance, then when valuing the house for the Letter Of Administration err on the high side, as if you then sell for a higher rate than stated you may face a Capital Gains Tax liability on the increase in value.

Do you know whose name the property is currently in at the Land Registry ? If the intention is to sell it there is no need to get it transferred from your mothers to your names prior to the sale as this can be dealt with as part of the sale process.

If it was held jointly by your mum and dad, or if it was in his name and there is a will leaving everything to your mum (or someone got letters of administration when he died) then you will probably need to show a copy of his death certificate and in the latter case probably the will / LoA to show that your mum inherited it from him.

Digs1975

Many thanks all - such helpful pointers and advice :-)

The propoerty is solely owned and registered in mums name.

We have not crossed the bridge about what we intend to do with the property, am conscious not to make any rash decisions at a highly emotive time.