The Lemon Fool

My mother in law passed away last week and I shall attempt to do the probate. Her estate is slightly more than the single persons allowance of 325k but I understand she can also claim her husbands relief ( he passed away fifteen years ago ). Is there a box or something on the forms or do I have to write to HRMC.

Many thanks,


SB

Snowbadger wrote:My mother in law passed away last week and I shall attempt to do the probate. Her estate is slightly more than the single persons allowance of 325k but I understand she can also claim her husbands relief ( he passed away fifteen years ago ). Is there a box or something on the forms or do I have to write to HRMC. ...

It is the unused Inheritance Tax threshold (or 'nil rate band') from the previously deceased spouse or civil partner that can be claimed, depending on the circumstances. Broadly, if 100% of his estate went to the spouse, then her estate should be entitled to 2 x the now applicable nil rate band, subject to any adjustment needed in view of box 10 included below, headed Total chargeable value of gifts and other transfers of value made in the 7 years before the date of death.

The form itself is IHT402 and may be found here, noting the Information you will need :

https://assets.publishing.service.gov.u ... IHT402.pdf

The £325,000 you mention is the nil rate band ignoring property. If a residence property was involved in your m-i-l's estate on death, then it may benefit from the additional threshold (or residence nil rate band (RNRB)) for Inheritance Tax in various circumstances as shown below, depending on the market value of the residence. Noting (For deaths in the following tax years it will be: £125,000 in 2018 to 2019), whereas the examples use a larger additional threshold applicable in later years.

https://www.gov.uk/guidance/inheritance ... -rate-band

Thanks PD,
I presume I just have to add up any gifting from my F in L passing, and reduce as appropriately ( I don't remember any! ).


Once again

Thanks for prompt concise response,

SB

Snowbadger wrote: ... I presume I just have to add up any gifting from my F in L passing, and reduce as appropriately ( I don't remember any! ). ...

You need to look at how his estate was distributed on his death (if all to his spouse, then they can be ignored, assuming the surviving M-i-L was UK Domiciled).

You also need to look at any gifts he made in the previous 7 years, that were not covered by the other reliefs and exemptions available at the time of such lifetime gifts (such as the spousal exemption and the annual IHT exemption of £3,000), which would have used up part of his nil rate band.

If any Trusts were involved or he had made Gifts with Reservation, matters would get far more complicated, as can be seen below (hoping that's not relevant, from what you've said earlier):

https://www.gov.uk/hmrc-internal-manual ... /ihtm43020 and thereabouts.

Once again PD,
thanks for your reply. I have spent the day reading the relevant information and filling out the forms and I may regret saying this but it all looks rather straight forward. As I am not the executor but the brother in law who has all things finance related dropped in his lap I will find the most difficult part chasing up signatures.
My F-in-Law died intestate 15yrs ago, so one form to transfer unused nil rate band, one for probate application and one for estate information. Simples. Difficult to see how it can cost so much from a solicitor.

Once again,

thanks for all your help

SB

Is there an additional form to claim residential property nil rate band?

Jabd2001 wrote:Is there an additional form to claim residential property nil rate band?

This should be the full list of current IHT forms:

https://www.gov.uk/government/collectio ... -tax-forms

The relevant forms appear to be IHT435 and IHT436.

Hi Guys,
I found filling out the probate forms and following the procedure fairly straight forward but my brother in law who is the executor of the will decided to engage a solicitor as the fees were reasonable (£600) and following the dictum of " He who does nothing, doesn't get blamed when things go wrong" I was pleased to be relieved of the task. I have however become a little concerned about the CGT position of her house.
Four years last April when she went into care, her sons tried to sell her house to help pay for the costs but could not get a buyer. They then let the property. I have read that after three years the care home becomes her main residence so her house is subject to CGT on completion of sale. There also seems to be a debate as to the valuation for CGT, is it from the initial purchase or from when she had been resident at the nursing home.

As always,

Thanks in advance.

SB

Assuming the house was not sold when she was alive, the unrealised gain is wiped out on death. If the administrators sell the house, any gain is calculated from value at time of death. If they assign it to beneficiaties, then their base cost becomes the probate value.

If it was sold when she was alive, then the base cost is the purchase cost but PRR is available pro rata for the applicable period.

Thanks Pirate.

SB