| HMRC and Probate 12:07 - Nov 3 with 1393 views | Zx1988 |
A quick question for those who've had experience of such things...
Currently administering the estate of a relative which, without question, is going to be liable for IHT.
There will be the assets that HMRC will clearly know about - their home, bank accounts, other bits and pieces with their name legally attached to them. There will also be the specific legacies in the will, for which HMRC will want a value attributing.
What happens when it comes to the broader question of chattels? HMRC will clearly (one assumes!) never know whether or not Great Aunt Maud had any other jewellery of value, whether the artwork in the living room was a genuine Van Gogh or just a print from Athena, or whether her furniture was from IKEA or Versailles.
Will they tend to look at the broader declared value of the estate, and form a view as to whether chattels have been accurately declared ("hmm... a million-pound estate with no chattels of value? Chinny reckon...")? Or is it very much an 'honour system' with those sorts of things?
I know that the general advice for anything like this is never to underestimate the power of HMRC, but it would be good to know just how far that power extends. [Post edited 3 Nov 12:11]
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| HMRC and Probate on 12:11 - Nov 3 with 1349 views | lowhouseblue |
when i did this i got a valuer to come and put a figure on the house contents for probate purposes. but furniture etc doesn't lead to a very big sum. |  |
| And so as the loose-bowelled pigeon of time swoops low over the unsuspecting tourist of destiny, and the flatulent skunk of fate wanders into the air-conditioning system of eternity, I notice it's the end of the show |
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| HMRC and Probate on 12:18 - Nov 3 with 1290 views | Ryorry |
I’d take advice from a good solicitor who deals with such things regularly. You don’t want to be always looking over your shoulder for fear of HMRC catching up with you later.
It’s interesting though, cos in my late Mum’s estate was a religious icon that she’d thought incredibly valuable, which turned out to be a cheap, worthless imitation.
HMRC would never have known either way - unless it had been genuine and I’d sold it for its real value, in which case they’d probably have been investigating my bank account after I’d completed the annual self-assessment form! |  |
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| HMRC and Probate on 12:24 - Nov 3 with 1252 views | ArnoldMoorhen |
It largely depends on whether you want a functioning NHS or not. ;-)
That's a cheap shot, obviously, but if the estate was being administered by a legal professional then they would be under both legal and professional ethics obligations to carry out the probate scrupulously.
The question you seem to be asking is:
"Will I get away with it?"
Probably, but...
Is it worth risking prison for? (In the case of provable, deceitful fraud)
Would your relative have wanted to avoid the current obligation to wider society?
My approach would be:
Get valuations from professionals for higher value items. Get three, if very high value. There is nothing unfair in keeping the lowest quotes as the declared value, of it came from an independent assessment.
Agree with beneficiaries who is going to have what "Of sentimental value" if not explicitly stated in the will, and if some of those items have higher monetary value than others, agree the relative values amongst yourselves and then re ord those values for tax purposes.
Also note:
If you are the Executor and you are doing a lot of work, then you are able to claim reasonable expenses from the Estate for loss of earnings, accommodation and subsistence.
If other beneficiaries aren't doing any of the work, and maybe aren't on your side of the family, and possibly are rewarded in the will disproportionately in comparison to yourself, then you might want to stay in quite nice hotels and eat some good meals! | | | |
| HMRC and Probate on 12:30 - Nov 3 with 1209 views | Zx1988 |
| HMRC and Probate on 12:24 - Nov 3 by ArnoldMoorhen |
It largely depends on whether you want a functioning NHS or not. ;-)
That's a cheap shot, obviously, but if the estate was being administered by a legal professional then they would be under both legal and professional ethics obligations to carry out the probate scrupulously.
The question you seem to be asking is:
"Will I get away with it?"
Probably, but...
Is it worth risking prison for? (In the case of provable, deceitful fraud)
Would your relative have wanted to avoid the current obligation to wider society?
My approach would be:
Get valuations from professionals for higher value items. Get three, if very high value. There is nothing unfair in keeping the lowest quotes as the declared value, of it came from an independent assessment.
Agree with beneficiaries who is going to have what "Of sentimental value" if not explicitly stated in the will, and if some of those items have higher monetary value than others, agree the relative values amongst yourselves and then re ord those values for tax purposes.
Also note:
If you are the Executor and you are doing a lot of work, then you are able to claim reasonable expenses from the Estate for loss of earnings, accommodation and subsistence.
If other beneficiaries aren't doing any of the work, and maybe aren't on your side of the family, and possibly are rewarded in the will disproportionately in comparison to yourself, then you might want to stay in quite nice hotels and eat some good meals! |
Yes, I definitely agree with you regarding the moral side of it all!
I think we and the relative are/were broadly on the same page regarding it all. She didn't have much until her 'bachelor-for-life' brother died five years ago, and left her his whole estate, which attracted a fairly hefty IHT bill.
I think we're all just a little sore that, given the nature of IHT legislation, HMRC will now get two bites at that particular cherry, rather than the next-to-nothing that they'd have probably got if both she and her brother had married (other people, they're not from Norfolk!), had children, and been able to take advantage of the increased allowances afforded to those who do as society expects. | |
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| HMRC and Probate on 12:35 - Nov 3 with 1175 views | Freddies_Ears |
| HMRC and Probate on 12:24 - Nov 3 by ArnoldMoorhen |
It largely depends on whether you want a functioning NHS or not. ;-)
That's a cheap shot, obviously, but if the estate was being administered by a legal professional then they would be under both legal and professional ethics obligations to carry out the probate scrupulously.
The question you seem to be asking is:
"Will I get away with it?"
Probably, but...
Is it worth risking prison for? (In the case of provable, deceitful fraud)
Would your relative have wanted to avoid the current obligation to wider society?
My approach would be:
Get valuations from professionals for higher value items. Get three, if very high value. There is nothing unfair in keeping the lowest quotes as the declared value, of it came from an independent assessment.
Agree with beneficiaries who is going to have what "Of sentimental value" if not explicitly stated in the will, and if some of those items have higher monetary value than others, agree the relative values amongst yourselves and then re ord those values for tax purposes.
Also note:
If you are the Executor and you are doing a lot of work, then you are able to claim reasonable expenses from the Estate for loss of earnings, accommodation and subsistence.
If other beneficiaries aren't doing any of the work, and maybe aren't on your side of the family, and possibly are rewarded in the will disproportionately in comparison to yourself, then you might want to stay in quite nice hotels and eat some good meals! |
Good advice re expenses. 45p per mile of own car use can add up to quite a bit. I recently had to deal with my ex-brother-in-law's estate. Nowhere near IHT, but I did get valuations from an antiques dealer for half a dozen bits & pieces.
And my personal Executor's expenses concluded at around £4,000 incl hotels. I also incurred a further £3,500 of expenses such as house clearance, gardening, cleaning, more cleaning & even more cleaning. Plus house sale costs, of which around £1,500 was front-end-loaded. (Property was 250 miles away!).
I sold his car early on for £5,300 to Webuyanywreck, and the solicitor handling the probate for me allowed me to keep that to offset expenses, which I was grateful for. | | | |
| HMRC and Probate on 12:41 - Nov 3 with 1157 views | Zx1988 |
| HMRC and Probate on 12:35 - Nov 3 by Freddies_Ears |
Good advice re expenses. 45p per mile of own car use can add up to quite a bit. I recently had to deal with my ex-brother-in-law's estate. Nowhere near IHT, but I did get valuations from an antiques dealer for half a dozen bits & pieces.
And my personal Executor's expenses concluded at around £4,000 incl hotels. I also incurred a further £3,500 of expenses such as house clearance, gardening, cleaning, more cleaning & even more cleaning. Plus house sale costs, of which around £1,500 was front-end-loaded. (Property was 250 miles away!).
I sold his car early on for £5,300 to Webuyanywreck, and the solicitor handling the probate for me allowed me to keep that to offset expenses, which I was grateful for. |
Yes, we're going to be claiming any and all expenses we can, given that it all comes out of the estate before the IHT calculation.
It's a 250mi round trip for me to check on her flat, so that'll make a fair dent on the taxable excess at 45p per mile. We also intend to make full use of the ability to deduct the costs of the wake from the estate pre-IHT. | |
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| HMRC and Probate on 13:02 - Nov 3 with 1054 views | Smoresy |
| HMRC and Probate on 12:30 - Nov 3 by Zx1988 |
Yes, I definitely agree with you regarding the moral side of it all!
I think we and the relative are/were broadly on the same page regarding it all. She didn't have much until her 'bachelor-for-life' brother died five years ago, and left her his whole estate, which attracted a fairly hefty IHT bill.
I think we're all just a little sore that, given the nature of IHT legislation, HMRC will now get two bites at that particular cherry, rather than the next-to-nothing that they'd have probably got if both she and her brother had married (other people, they're not from Norfolk!), had children, and been able to take advantage of the increased allowances afforded to those who do as society expects. |
See your viewpoint. Perhaps a counter would be, had they instead done "as society expects", said cherry would be out of reach to wider family as well as HMRC. It's a less conventional windfall for all beneficiaries. | | | |
| HMRC and Probate on 13:14 - Nov 3 with 1019 views | baxterbasics |
Having similar questions myself as my father passed away six weeks ago. Because he lived and worked in the USA for a good chunk of the past 15 years, about 25% of his entire wealth is in a US pension fund / 401K . Hard to get any straight answers from people either side of the Atlantic about how best to handle, can we avoid double taxation, and how to declare on the probate forms. Apparently being a pension it *should* be exempt from IHT (though apparently that rule changes from April) but am sure Ms Reeves will have some way to get her hands on a chunk. |  |
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| HMRC and Probate on 13:20 - Nov 3 with 984 views | BanksterDebtSlave |
On a separate but related point does anybody know if wills are always a matter of public record after the probate process.
Miss Slave recently lost someone very close to her but not family and another person has self appointed herself as executor,(her brother, also not family as none remain, is doing the probate) handled all the funeral arrangements etc, while also turning down all offers of help. A diamond ring had been promised to Miss Slave's sister but when thus was raised the woman concerned claimed the same promise was made to her and other jewellery seems to have gone the same way too. All seems a bit suspect tbh but not sure what, if anything, can be done. |  |
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| HMRC and Probate on 14:11 - Nov 3 with 887 views | Churchman |
The question of IHT and what HMRC look at is one I’ve had to consider 15 years ago with the father in law, recently with my father’s estate and now with the brother in law’s estate which will incur IHT.
Basics: £325k is exempt. Over that 40% tax. If the deceased has been married, their allowance may be taken into account. If there are say two children, a further £175k per child will be exempt. For say my brother in law who was single and was left his father’s house (considerable IHT paid), the allowance on on his estate will only be £325k. Rachel will have been skipping round the room until she reads the will.
Anything left to charity, church, sporting organisation, pensions are all exempt from IHT, so get your hanky out Rachel. You’re going to get considerably less than you thought. Never mind eh, tax was paid on everything that was bought in the first place and a lot of IHT when his father died, so HMG has done ok over the years and maybe it’ll be nice for charities to get a few bob- they certainly need it. I digress - apols.
With property it’s advisable to get a proper valuation (a ‘red book’ valuation) at date of death. HMRC won’t contest that. Also, if you say manipulate the value for IHT, don’t forget if you do you might get clobbered for Capital Gains at 40%.
Now contents. Yes the value for IHT has to be included. But it’s the sale value (auction) so most contents are basically worthless. Who wants old dinner services, brown furniture, smelly old settees and second hand beds? Nobody these days.
Other stuff like say a Rolex watch, probably untraceable. White goods, TVs etc? what are they’re worth? Nothing. Sale value, not retail is the key thing to remember. So for my brother in law the contents will be a minus figure because we are going to have to pay house clearers.
Where it’s better than that, a nominal value should suffice. If there is a car, unless it’s a Ferrari, a Parker’s auction price will give you the minimum figure. If it’s a 25 year old Avensis that’s been sitting for three years, whatever they’re worth scrapper/recycle dudes will pay for it will get included.
In terms of what HMRC and what they look at, the basic rule is the larger the estate and IHT liability the closer they’ll look, should they look at all. That’s recent advice from a chum who was a Tax Inspector and knows.
Remember, a high percentage of tax inspectors have been booted out to save money. In 2009 1 in 100 of ‘normal’ cases where there was IHT liability were being looked at. I was told by one that as long as nothing looked out of kilter on the submission form all will be well. After the tories axe, that number won’t have increased.
This is just my personal experience sprinkled with a little knowledge. |  | | |
| HMRC and Probate on 14:19 - Nov 3 with 862 views | ElderGrizzly |
| HMRC and Probate on 12:11 - Nov 3 by lowhouseblue |
when i did this i got a valuer to come and put a figure on the house contents for probate purposes. but furniture etc doesn't lead to a very big sum. |
This.
I did this with a Great Aunt's estate a few years ago and it gave peace of mind HMRC weren't chasing for anything else later. |  | | |
| HMRC and Probate on 14:22 - Nov 3 with 846 views | bluelagos |
| HMRC and Probate on 13:14 - Nov 3 by baxterbasics |
Having similar questions myself as my father passed away six weeks ago. Because he lived and worked in the USA for a good chunk of the past 15 years, about 25% of his entire wealth is in a US pension fund / 401K . Hard to get any straight answers from people either side of the Atlantic about how best to handle, can we avoid double taxation, and how to declare on the probate forms. Apparently being a pension it *should* be exempt from IHT (though apparently that rule changes from April) but am sure Ms Reeves will have some way to get her hands on a chunk. |
If ever there was case of "speak to an expert" rather than someone on a message board (well meaning as we all are) I would suggest it's yours... |  |
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| HMRC and Probate on 14:49 - Nov 3 with 778 views | Meadowlark |
| HMRC and Probate on 14:22 - Nov 3 by bluelagos |
If ever there was case of "speak to an expert" rather than someone on a message board (well meaning as we all are) I would suggest it's yours... |
I agree with the sentiment, but many "experts" in my experience are not. I was co-executor for my father's estate, along with a law firm because my dad thought that having a solicitor to help me would make things easier. It didn't. I had to push them and even explain the law to them in one instance! The estate agents for the house sale were no better. They just want their cut and the more they can get and the quicker they can get it the better.
Apologies to any real experts reading this, but I think the advice on this forum is generally of a high standard and very helpful, and of course it costs nothing! |  | | |
| HMRC and Probate on 14:55 - Nov 3 with 754 views | bluelagos |
| HMRC and Probate on 14:49 - Nov 3 by Meadowlark |
I agree with the sentiment, but many "experts" in my experience are not. I was co-executor for my father's estate, along with a law firm because my dad thought that having a solicitor to help me would make things easier. It didn't. I had to push them and even explain the law to them in one instance! The estate agents for the house sale were no better. They just want their cut and the more they can get and the quicker they can get it the better.
Apologies to any real experts reading this, but I think the advice on this forum is generally of a high standard and very helpful, and of course it costs nothing! |
"of course it costs nothing"
Only if the advice is right!
Appreciate there's plenty of dodgy characters out there - but when you are getting into taxation treaties (To avoid double taxation) - unless someone is genuinely a tax expert - I do think seeking out a professional would be very sensible.
Or do what I did - be born to poor(ish) parents :-) | |
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| HMRC and Probate on 15:11 - Nov 3 with 705 views | Daninthecampo |
Its worth looking at their house contents insurance policy, this will indicate the value of their higher end items and overall values , which would also be easy for HMRC to obtain if required. | | | |
| HMRC and Probate on 15:15 - Nov 3 with 699 views | DJR |
| HMRC and Probate on 14:22 - Nov 3 by bluelagos |
If ever there was case of "speak to an expert" rather than someone on a message board (well meaning as we all are) I would suggest it's yours... |
Agreed. It sounds to me like it requires specialist tax advice.
The starting point would appear be a decent firm of probate solicitors who have the right sort of experience and contacts to seek that advice.
It might, however, not be cheap. [Post edited 3 Nov 15:27]
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| HMRC and Probate on 15:22 - Nov 3 with 666 views | Churchman |
| HMRC and Probate on 14:49 - Nov 3 by Meadowlark |
I agree with the sentiment, but many "experts" in my experience are not. I was co-executor for my father's estate, along with a law firm because my dad thought that having a solicitor to help me would make things easier. It didn't. I had to push them and even explain the law to them in one instance! The estate agents for the house sale were no better. They just want their cut and the more they can get and the quicker they can get it the better.
Apologies to any real experts reading this, but I think the advice on this forum is generally of a high standard and very helpful, and of course it costs nothing! |
I agree with you Meadowlark. I’d add experts are not infallible. My dad’s brother worked for a very prestigious law firm for many years acting for many high profile people before setting up his own firm. He did conveyancing and wills for the family - particularly his brothers. Not only did he make mistakes when I bought my first flat, he also missed stuff and made a dogs dinner of my parents’ wills which has had to be unpicked or in the case of the house actually register it at the LR. Subsequently the people ‘experts’) actually dealing with my dad’s estate have been poor too.
People on here have a wealth of of differing experiences and at least one is in the legal profession. People will generally caveat what advice they offer and will point people to experts - you see it with financial advice in particular.
I agree, the advice is generally of a high standard on here.
When it comes to it there’s no substitute for employing an ‘expert’ or specialist. Doing your own brain surgery isn’t always the best idea - the trick is finding an expert or specialist who is competent. | | | |
| HMRC and Probate on 15:32 - Nov 3 with 637 views | baxterbasics |
| HMRC and Probate on 14:22 - Nov 3 by bluelagos |
If ever there was case of "speak to an expert" rather than someone on a message board (well meaning as we all are) I would suggest it's yours... |
Oh don't worry we are! I certainly didn't see TWTD as first stop to seek advice. Just thought I'd throw it in there since the topic came up.
Certainly agree with further points made here that the 'qualified experts' don't always make this more straightforward. | |
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| HMRC and Probate on 16:51 - Nov 3 with 548 views | Chondzoresk |
I used to value chattels for deceased estates, plus insurance. But what you need is a valuer to inspect all the chattels. They will then draw up a valuation which is submitted to the solicitor and any other executors of the estate. That will then be sent to HMRC to be passed and grant of probate. This all takes time……and unfortunately money. We charge (when I mean we, I mean most valuers)by the hour. Some charge a percentage of estate value. Under no circumstances use the percentage method. It’s underhand and liable to abuse. For probate, the values need to be the lowest open market value……
Play it safe, get it valued, get a decent valuer and get certificates. Clear your mind.
I would help and can if it’s one or 2 bits, but to carry out an entire house contents is something I would pass on nowadays.
I can suggest names for you to contact if you can give me an idea of which part of the country you are in. You are more than welcome to message me.
Chondzoresk |  | | |
| HMRC and Probate on 16:58 - Nov 3 with 525 views | Chondzoresk |
| HMRC and Probate on 15:32 - Nov 3 by baxterbasics |
Oh don't worry we are! I certainly didn't see TWTD as first stop to seek advice. Just thought I'd throw it in there since the topic came up.
Certainly agree with further points made here that the 'qualified experts' don't always make this more straightforward. |
Sometimes there are specialists where least expect them. | | | |
| HMRC and Probate on 17:23 - Nov 3 with 458 views | DaveJC52 |
| HMRC and Probate on 12:30 - Nov 3 by Zx1988 |
Yes, I definitely agree with you regarding the moral side of it all!
I think we and the relative are/were broadly on the same page regarding it all. She didn't have much until her 'bachelor-for-life' brother died five years ago, and left her his whole estate, which attracted a fairly hefty IHT bill.
I think we're all just a little sore that, given the nature of IHT legislation, HMRC will now get two bites at that particular cherry, rather than the next-to-nothing that they'd have probably got if both she and her brother had married (other people, they're not from Norfolk!), had children, and been able to take advantage of the increased allowances afforded to those who do as society expects. |
HMRC may ask to see a valuation of contents or at least an explanation as to how you arrived at the figure returned for contents in the inheritance tax account. IMO (retired, but 50 years a Probate Lawyer) better to have obtained a valuation from an "expert" at the outset before items are disposed of. I would generally ask the Valuer to separately identify and value items over, say £1,000, & provide a summary for the remainder eg "contents of lounge £X".
Also, if bachelor brother died within 5 years of his sister, look into Quick Succession Relief | | | |
| HMRC and Probate on 17:41 - Nov 3 with 402 views | Zx1988 |
| HMRC and Probate on 17:23 - Nov 3 by DaveJC52 |
HMRC may ask to see a valuation of contents or at least an explanation as to how you arrived at the figure returned for contents in the inheritance tax account. IMO (retired, but 50 years a Probate Lawyer) better to have obtained a valuation from an "expert" at the outset before items are disposed of. I would generally ask the Valuer to separately identify and value items over, say £1,000, & provide a summary for the remainder eg "contents of lounge £X".
Also, if bachelor brother died within 5 years of his sister, look into Quick Succession Relief |
That's amazing advice on the Quick Succession Relief - absolute Game-changer. | |
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| HMRC and Probate on 08:35 - Nov 4 with 152 views | Nthsuffolkblue |
| HMRC and Probate on 12:30 - Nov 3 by Zx1988 |
Yes, I definitely agree with you regarding the moral side of it all!
I think we and the relative are/were broadly on the same page regarding it all. She didn't have much until her 'bachelor-for-life' brother died five years ago, and left her his whole estate, which attracted a fairly hefty IHT bill.
I think we're all just a little sore that, given the nature of IHT legislation, HMRC will now get two bites at that particular cherry, rather than the next-to-nothing that they'd have probably got if both she and her brother had married (other people, they're not from Norfolk!), had children, and been able to take advantage of the increased allowances afforded to those who do as society expects. |
I would agree with the advice so far except I would only get 1 valuation (unless you have good cause to doubt the accuracy of it - choosing a good valuer should mean you don't - but if you want to sell something possibly of high value, you might want a specialist to value it).
As for the being hit twice, you might look at it the other way that this inheritance is all bonus assets to the recipients that you wouldn't have got otherwise. Had they been a married couple with children you wouldn't be getting any of it as it would be going to them anyway.
EDIT: And, at least it sounds like they weren't intestate which would have created other costs I would imagine. [Post edited 4 Nov 8:36]
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| HMRC and Probate on 09:49 - Nov 4 with 102 views | Swansea_Blue |
| HMRC and Probate on 14:49 - Nov 3 by Meadowlark |
I agree with the sentiment, but many "experts" in my experience are not. I was co-executor for my father's estate, along with a law firm because my dad thought that having a solicitor to help me would make things easier. It didn't. I had to push them and even explain the law to them in one instance! The estate agents for the house sale were no better. They just want their cut and the more they can get and the quicker they can get it the better.
Apologies to any real experts reading this, but I think the advice on this forum is generally of a high standard and very helpful, and of course it costs nothing! |
I felt like I got my fingers burnt with a solicitor. I wish I’d never used them now as they did little more than administration. I had to unpick the finances with an accountant in the end - who was infinitely better and an order of magnitude cheaper.
If there is anything of value, best to get valuations if you can just in case there’s a follow-up. I didn’t have that problem, and they took my figures at face value but they were small.
Good luck dealing with HMRC though. I’m 4 years on from my father’s death and am still waiting for HMRC to finalise. I’ll be dead by the time they get around to it. |  |
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