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  • FIRST POST
    • morrit
    • By morrit 17th Oct 19, 2:32 PM
    • 93Posts
    • 25Thanks
    morrit
    Inheritance question
    • #1
    • 17th Oct 19, 2:32 PM
    Inheritance question 17th Oct 19 at 2:32 PM
    Inheritance question
    Hi.



    I have a friend (no, really I do).

    Her father passed away leaving his assets to his daughter and her half sister (they share the same mother but her father and mother split a few years after she was born and the mother remarried and had another daughter. My friend is the mother and father's daughter). This was 3 years ago. The majority of this time has been waiting for the flat to be sold.

    It recently got bought and finalised. I'm not sure if the money is available yet.

    She has recently been sent an email regarding an issue and asked me to see what I could find out.

    I thought this would be the best place to maybe ask but can't find an inheritance tax thread. Could someone please translate what she needs to do?

    I should advise, that their mother suffered a brain hemorrhage several years ago and has lost a significant amount of short term and long term memory.

    My friend is a 'stick her head in the sand' type and suffers extreme anxiety. It took a lot of reassuring for me to persuade her to let me ask on here.

    The email is as follows :

    I have located the second probate file and I see that at a meeting which you had with my former colleague, ******, on 26th May 2017 you informed him that your mother was agreeable to enact the second part of the Will where it was 80% to ***** and 20% to yourself.



    However there is absolutely nothing in writing from her to this effect.



    Consequently, I would need your mother to confirm in writing that the entitlements she was due under clause 6 of the Will were to be gifted to you and **** as to 20% and 80% respectively.



    As no Deed of Disclaimer was signed by your mother within two years of the date of death she will indeed be making a lifetime gift of the net estate for Inheritance Tax purposes.

    Yours *****


    The estate is worth less than 300k which I belive is the point inheritance tax kicks in.

    Their mother is regarded as compus.

    From the sounds of it, the mother simply needs to send in a letter agreeing to the will, and my guess is that this gift still needs to be reported to HMRC for tax purposes. Am I correct?

    If so, would the solicitors to her fathers estate do this or is this something her mother needs to do herself as they are not acting for her?

    I think she is concerned that the same thing is going to happen to me whereby the entire estate gets swallowed despite the circumstances being different (I lost my inheritance to my mother's creditors).

    Thank you in advance.
Page 1
    • relaxtwotribes
    • By relaxtwotribes 17th Oct 19, 3:40 PM
    • 268 Posts
    • 119 Thanks
    relaxtwotribes
    • #2
    • 17th Oct 19, 3:40 PM
    • #2
    • 17th Oct 19, 3:40 PM
    There needs to be a bit more information, but reading between the lines it seems that Clause 5 (or other) of your friend's father's Will left his estate to your friend's mother. Clause 6 then dictated what happened to his estate if your friend's mother predeceased him and your friend's mother has indicated in 2017 to the solicitors that she wants the estate to be distributed as if she had predeceased him. But that was never documented within 2 years of the date of death. So, now your friend's mother has indeed inherited the estate and she now wishes to give 80% to **** and 20% to your friend.
    Those gifts do not need to be reported to HMRC, except that if your friend's mother dies within 7 years of the gifts, then they would be reported to HMRC as part of her estate. There is not enough information to say if any inheritance tax would become due, but if your friend's father gave his whole estate to your friend's mother, then your friend's mother's estate would have to be above 650k (being 2 x 325k) before any tax becomes due.

    BTW, you didn't lose your inheritance to your mother's creditors. They were paid their dues and if that left nothing then you did not have an inheritance to lose.
    • MovingForwards
    • By MovingForwards 17th Oct 19, 6:46 PM
    • 2,511 Posts
    • 2,972 Thanks
    MovingForwards
    • #3
    • 17th Oct 19, 6:46 PM
    • #3
    • 17th Oct 19, 6:46 PM
    This:

    "I should advise, that their mother suffered a brain hemorrhage several years ago and has lost a significant amount of short term and long term memory."

    And this:

    "Their mother is regarded as compus."

    Are contradictory and if any indication was given to the solicitors I hope they requested medical evidence (letter from her GP) to support she is able to understand what she is doing and the potential long-term actions of what she wants to do.
    • xylophone
    • By xylophone 17th Oct 19, 9:40 PM
    • 31,596 Posts
    • 19,592 Thanks
    xylophone
    • #4
    • 17th Oct 19, 9:40 PM
    • #4
    • 17th Oct 19, 9:40 PM
    Your friend's mother suffered the brain haemorrhage several years before her father's death? He died in 2016?

    What is the "second probate file"?

    Your friend's father appointed a firm of solicitors as executors of his estate?

    In 2017 your friend had a meeting with one of the partners and told him that her mother wished to disclaim her inheritance so that her daughters might inherit?

    That partner made a note of this but did not write to/request a meeting with the mother to discuss the matter?

    Neither did he request her to execute a Deed of Disclaimer?

    Another partner has taken over the administration of the estate and is still dealing with your friend rather than her mother despite the fact that mother is compos mentis?



    Is he aware that the mother has severe short and long term memory impairment?
    • morrit
    • By morrit 21st Oct 19, 11:21 AM
    • 93 Posts
    • 25 Thanks
    morrit
    • #5
    • 21st Oct 19, 11:21 AM
    • #5
    • 21st Oct 19, 11:21 AM
    There needs to be a bit more information, but reading between the lines it seems that Clause 5 (or other) of your friend's father's Will left his estate to your friend's mother. Clause 6 then dictated what happened to his estate if your friend's mother predeceased him and your friend's mother has indicated in 2017 to the solicitors that she wants the estate to be distributed as if she had predeceased him. But that was never documented within 2 years of the date of death. So, now your friend's mother has indeed inherited the estate and she now wishes to give 80% to **** and 20% to your friend.
    Those gifts do not need to be reported to HMRC, except that if your friend's mother dies within 7 years of the gifts, then they would be reported to HMRC as part of her estate. There is not enough information to say if any inheritance tax would become due, but if your friend's father gave his whole estate to your friend's mother, then your friend's mother's estate would have to be above 650k (being 2 x 325k) before any tax becomes due.

    BTW, you didn't lose your inheritance to your mother's creditors. They were paid their dues and if that left nothing then you did not have an inheritance to lose.
    Originally posted by relaxtwotribes
    Thank you for responding despite the limited information, that was all I was given. Coupled with other answers I can let my friend know to give them an idea what's going on. Also, very handy to know re the tax.

    Re my inheritance - very true also. Its complicated and upsetting as it was only earlier this year.
    • morrit
    • By morrit 21st Oct 19, 11:29 AM
    • 93 Posts
    • 25 Thanks
    morrit
    • #6
    • 21st Oct 19, 11:29 AM
    • #6
    • 21st Oct 19, 11:29 AM
    This:

    "I should advise, that their mother suffered a brain hemorrhage several years ago and has lost a significant amount of short term and long term memory."

    And this:

    "Their mother is regarded as compus."

    Are contradictory and if any indication was given to the solicitors I hope they requested medical evidence (letter from her GP) to support she is able to understand what she is doing and the potential long-term actions of what she wants to do.
    Originally posted by MovingForwards
    Their solicitors apparently know this and have no issues, or haven't said anything anyway. I see where you are coming from though.
    I think a letter from their GP would be worthwhile just incase though. Thank you.
    • morrit
    • By morrit 21st Oct 19, 11:34 AM
    • 93 Posts
    • 25 Thanks
    morrit
    • #7
    • 21st Oct 19, 11:34 AM
    • #7
    • 21st Oct 19, 11:34 AM
    Your friend's mother suffered the brain haemorrhage several years before her father's death? He died in 2016?

    What is the "second probate file"?

    Your friend's father appointed a firm of solicitors as executors of his estate?

    In 2017 your friend had a meeting with one of the partners and told him that her mother wished to disclaim her inheritance so that her daughters might inherit?

    That partner made a note of this but did not write to/request a meeting with the mother to discuss the matter?

    Neither did he request her to execute a Deed of Disclaimer?

    Another partner has taken over the administration of the estate and is still dealing with your friend rather than her mother despite the fact that mother is compos mentis?



    Is he aware that the mother has severe short and long term memory impairment?
    Originally posted by xylophone
    This could be significant as if he DID write to her and she didn't respond, then this may require a letter from the GP all the more important. If the GP says no, then she (my friend) is going to have to request power of attorney I guess.

    Thank you for your response.
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