Probate/IHT query

Thumper_217

Hi,

Trying to do probate online but am totally lost and any help would be much appreciated.

Note figures below are not accurate for security reasons but are just for testing sort of answer queries please

Joint is shared with spouse who all joint funds will go to

House(joint) 520,000

Card Debt (joint) 2000

Bank (Joint) 7400

Shares (joint) 140,000

Bank (Solo) 250

ISA (Solo) 42000

Car (Solo) 4000

Dividends (solo) 1200

So that would make the full estate value 722342 which would be entered under gross estate value for IHT, correct?

Net estate value would NOT take off the credit card as it's joint?

Net Qualifying amount take away assets to spouse. Would that be 50% of joint, or all of Joint? - (so 675 k, or half of that?) - The will also mentions an amount to go to an offspring which would be more than is solo owned :(

Then on to the gross value for probate - would that just be 47k then? as the joint stuff removed.

Net value for probate is gross less debt/funeral. - Funeral already paid for pre event. Debt is joint so net would be the same 47K?

The IHT calculator tells me nothing is due - though I believe I still have to send an IHT400

Any help would be very much appreciated.

Thanks

Famau

If you leave all your assets to a legal spouse or civil partner, no Inheritance Tax (IHT) is payable, regardless of the estate's value. The Spousal Exemption allows the 100% tax-free transfer of assets….

Keep_pedalling

Not sure how you get to a value of £722k when the bulk of the assets are joint. Anyway as everything goes to a spouse then the estate is exempt and no IHT is due and no IHT return required.

Probate is not required for any of the joint assets or the car, but you probably need if for the ISA but worth checking if the that could be released without it.

Thumper_217

Ta - that makes it considerably easier - and yes, the probate demand is so far from the big ISA only. (There's a left over ISA in our primary bank that haven't asked for it - but that's about 100 quids worth and they've said it doesn't matter because those bits are tiny :D

I just added the car for estate total.

Not sure if the the share companies will ask. Told them, but pending them coming back

The electricity company sort of has, though we're seeing the POA takes care of that - the weird bit on that is that the contract is in dads name - the direct debit going out of his spouses bank account and she's still alive thankfully:D

Thanks :)

poseidon1

https://forums.moneysavingexpert.com/discussion/6671968/probate-iht-query

Question, is this the interactive link below the pre -probate IHT calculator you used?

https://www.gov.uk/valuing-estate-of-someone-who-died/estimate-estate-value

If so, I cannot see how you arrived at an estate value any where near £722k, unless in error you put in the full value of the jointly held assets rather than just your father's 50% share.

You also mention an amount to offspring which you say exceed the value of solo held assets. On your numbers solo assets was £47,500 so how much in excess of that relates to offspring legacies? Incidentally what is the proposal ( if any ) to fill the gap in fulfilling the offspring legacies in their entirety?

In any event, all the offspring legacies does is to reduce your father's £325k nil rate band, so unless they were of that magnitude or above , there would be no IHT.

If you use the above calculator properly it not only informs the entries you then need for the online probate application, but calculates the net estate for probate purposes after deducting joint assets passing to spouse by survivorship.

Suggest you work through the calculator in the link above ( if it was not the one you used originally), and see what the new resulting outcome becomes.

Thumper_217

Yep. Used the HMRC one and got the half IHT - but then the probate seemed to indicate putting the gross as gross in before the joint stuff and got all confused..

As for the will, my father suggested leaving me 80k so in theory some should come from joint. The spouse insists on it, the will says it should be done and as one of the executors (spouse is the other) but it also feels like that's taking from the joint which belongs to the spouse (though if you split the joint 50/50 - there's enough there, for it to cover - I just feel I shouldn't be getting it because it's note solely his?).

DRS1

That is an interesting question. Maybe you need to ask a lawyer about it. If the joint assets all pass by survivorship then they are outside the will. So it may be that you can't get all £80k only whatever is covered by the will.

By the way you describe the shares as joint but the dividends as solo. That seems a little odd. If the dividends come from the shares why aren't they joint as well - indeed why aren't they in the joint bank account?

Keep_pedalling

https://forums.moneysavingexpert.com/discussion/comment/82030658#Comment_82030658

When you say suggested leaving you £80k does his will actually leave you £80k. If not then that would be considered as a gift from your mother, so none of his NRB would be used.

Thumper_217

On the shares Vs dividends, the dividends are paid out of an account that is solely my father's. The shares (as he labelled them) are in other organisations and joint, though I really have to look at the dividends. It's tiny and might be work related

On the other, I'll chat with a solicitor, thanks

bobster2

A few points….

Credit card debt is not normally joint. If someone has a credit card and a second card for someone (e.g. the spouse) the credit card debt belongs entirely to the primary card holder. If your father was the primary card holder then that debt needs to be settled in full from the estate.

Did your parents own their house as joint tenants or tenants in common? This makes a differences as to whether your father's interest in the property passes through survivorship or via his will.

Thumper_217

House was joint tenants. Thinking about the card, it goes out of the joint account but I wasn't thinking straight, so it's in his name, so it would be his debt?