Probate application help!

Jellybean2468

Hello, I know you'll probably tell me to pay for a solicitor but I'm really hoping some kind soul might help me with what should and shouldn't be included in my Dad's probate application.

I'm almost there but going round and round in circles with the exemptions particularly for the IHT part as much of it passes to my Mum. Please see below...

Probate gross = £226k

125k - they are tenants in common, so this represents half of the house value which passes to children

£85k - ISAs, stocks and shares and 50% of joint bank account with Mum

£13k - two cars registered in my Dad's name

£3k - Dad's possessions and also 50% household items shared with Mum

Probate net = £217k

£9k funeral costs, car loan settlement and credit card amount

When I use the IHT calculator it says the gross and net IHT amount is £0 because everything apart from 50% house share is going to my Mum. But should I still be adding the £125k house share left to the children? Anything else from the above that should be included in the IHT section?

Thank you so much to anyone who takes the time to respond, please do be gentle as my brain is mush at the moment, my Dad would always be the one to help me with things like this 😢

Keep_pedalling

No we are not going to tell you to use a solicitor that would just be a waste of money.

Does the will state that your mother is entitled to remain living in the home for as long as she wishes? If it does (and any decent will would include this clause) then you have not inherited anything yet and your father’s share goes into an immediate post death interest trust. The trust would be the legal owner but your mother would be the beneficial owner which makes it an exempt estate making the net amount for IHT will be £0.

That won’t be the case if his children have been left his share absolutely, but if that is the case the children should consider a deed of variation to correct this mistake. I say mistake because the trust is the most tax effective way of doing this (avoided CGT and additional SDLT for any child buying their first home) and provides his widow with greater long term security.

Jellybean2468

Thank you very much for replying in such a kind and helpful way, it's so good to know that I was on the right lines with the IHT but they make it so confusing even with the calculator!

Yes I should have specified that the Will definitely states that my Mum can live in the house as long as she wishes.

Keep_pedalling

That is good, you will need to register the trust with HMRC but there is no hurry to do that as it needs to be done with 2 years of your father’s death.

Jellybean2468

Thank you very much, that's yet another step of this process I wasn't aware of!

RAS

Good, if everything dad owned goes to mum and eventually goes to children/descendants, there's potentially a £1m IHT allowance when mum dies, under current rules.