Inheritance tax
Discussion
As I understand it. The threshold is £325,000, or £475,000 if the estate includes a home being passed on to spouse, children or grandchildren.
So for example if someone's estate consists of a house worth £300,000, and cash shares etc worth another £100,000 with the whole lot being passed to their daughters. Then no inheritance tax is due.
Is that right? A friend is one of the daughters in a broadly similar case to my example and the solicitor doing probate is sucking his teeth and talking about needing to mitigate inheritance tax. Something about the other parent who died 10 years ago leaving everything to his widow possibly passing on his allowance meaning a total £950k allowance now available depending on the arrangements at the time. Even though the estate is looking at being around the £400K mark.
So for example if someone's estate consists of a house worth £300,000, and cash shares etc worth another £100,000 with the whole lot being passed to their daughters. Then no inheritance tax is due.
Is that right? A friend is one of the daughters in a broadly similar case to my example and the solicitor doing probate is sucking his teeth and talking about needing to mitigate inheritance tax. Something about the other parent who died 10 years ago leaving everything to his widow possibly passing on his allowance meaning a total £950k allowance now available depending on the arrangements at the time. Even though the estate is looking at being around the £400K mark.
Dr Jekyll said:
As I understand it. The threshold is £325,000, or £475,000 if the estate includes a home being passed on to spouse, children or grandchildren.
So for example if someone's estate consists of a house worth £300,000, and cash shares etc worth another £100,000 with the whole lot being passed to their daughters. Then no inheritance tax is due.
Is that right? A friend is one of the daughters in a broadly similar case to my example and the solicitor doing probate is sucking his teeth and talking about needing to mitigate inheritance tax. Something about the other parent who died 10 years ago leaving everything to his widow possibly passing on his allowance meaning a total £950k allowance now available depending on the arrangements at the time. Even though the estate is looking at being around the £400K mark.
You are correct, possible problem could be if deceased has made gifts in the past, which could come back into the estate and use up the nil rate band, but as you state there is still the unused nil rate band from the other parent if needed. So for example if someone's estate consists of a house worth £300,000, and cash shares etc worth another £100,000 with the whole lot being passed to their daughters. Then no inheritance tax is due.
Is that right? A friend is one of the daughters in a broadly similar case to my example and the solicitor doing probate is sucking his teeth and talking about needing to mitigate inheritance tax. Something about the other parent who died 10 years ago leaving everything to his widow possibly passing on his allowance meaning a total £950k allowance now available depending on the arrangements at the time. Even though the estate is looking at being around the £400K mark.
The solicitor is probably sucking his teeth in order to try and justify their fees. Usually it's a little late to mitigate inheritance tax once the person has died!
Dr Jekyll said:
As I understand it. The threshold is £325,000, or £475,000 if the estate includes a home being passed on to spouse, children or grandchildren.
So for example if someone's estate consists of a house worth £300,000, and cash shares etc worth another £100,000 with the whole lot being passed to their daughters. Then no inheritance tax is due.
Is that right? A friend is one of the daughters in a broadly similar case to my example and the solicitor doing probate is sucking his teeth and talking about needing to mitigate inheritance tax. Something about the other parent who died 10 years ago leaving everything to his widow possibly passing on his allowance meaning a total £950k allowance now available depending on the arrangements at the time. Even though the estate is looking at being around the £400K mark.
I know it’s too late but why, oh, why use a solicitor for such a small estate?So for example if someone's estate consists of a house worth £300,000, and cash shares etc worth another £100,000 with the whole lot being passed to their daughters. Then no inheritance tax is due.
Is that right? A friend is one of the daughters in a broadly similar case to my example and the solicitor doing probate is sucking his teeth and talking about needing to mitigate inheritance tax. Something about the other parent who died 10 years ago leaving everything to his widow possibly passing on his allowance meaning a total £950k allowance now available depending on the arrangements at the time. Even though the estate is looking at being around the £400K mark.
My wife and I have just commpleted arrangements for my MIL. House, and similar sum as mentioned in various cash and equities.
It was really straightforward. Online form for probate, after completing HMRC declaration of assets and getting a reference showing no IHT liability.
I can’t stress enough just how straightforward and simple it’s been.
REALIST123 said:
I know it’s too late but why, oh, why use a solicitor for such a small estate?
My wife and I have just commpleted arrangements for my MIL. House, and similar sum as mentioned in various cash and equities.
It was really straightforward. Online form for probate, after completing HMRC declaration of assets and getting a reference showing no IHT liability.
I can’t stress enough just how straightforward and simple it’s been.
That is also correct. I had a client (I'm an IFA) a few years ago where they used a solicitor for her husband's estate, I basically did all the work in relating to investment valuations etc and also pointed out some things about the nil rate band that the solicitor didn't know, I did all the investment work as we thought that would save the solicitor time and reduce the fees, it may well have reduced their time but they certainly didn't reduce their fees! My wife and I have just commpleted arrangements for my MIL. House, and similar sum as mentioned in various cash and equities.
It was really straightforward. Online form for probate, after completing HMRC declaration of assets and getting a reference showing no IHT liability.
I can’t stress enough just how straightforward and simple it’s been.
Chainsaw Rebuild said:
I dealt with my Fathers myself. Assuming it’s not a particularly complex case and that you are reasonably good with forms, and google; You don’t need a solicitor.
A solicitor will take the stress out of it for you, whilst they are thinking up a big number to invoice you with.
Don't forget those strange £50 photocopying charges. They may as well state "slush fund".A solicitor will take the stress out of it for you, whilst they are thinking up a big number to invoice you with.
Who uses a photocopier nowadays ....
TwigtheWonderkid said:
Tiggsy said:
Pica-Pica said:
There has been a lot of political talk about (abolishing) inheritance tax this last year or two, so keep an eye on things post election.
Never gonna happen
In just waiting for a party to promise to abolish IHT, cut motoring taxes, reduce VAT and decimate the numbers and costs of both Houses of Parliament to allow for that, then I’ll know who to vote for.......
Tiggsy said:
Your understanding is right. If the other spouse died and left everything to their spouse then the recently deceased can double to their allowances. Though, based on your numbers, there’s no need.
Probably a silly question. But assuming they don't need both would it be simpler for them to use the extra £150K than the spouses allowance?Dr Jekyll said:
Tiggsy said:
Your understanding is right. If the other spouse died and left everything to their spouse then the recently deceased can double to their allowances. Though, based on your numbers, there’s no need.
Probably a silly question. But assuming they don't need both would it be simpler for them to use the extra £150K than the spouses allowance?As others have said, the hard part is working out what everything is worth. Filling in the forms is the easy bit, you are just ticking a few boxes and adding up a few sums. iirc there is even an online calculator to help you work out the allowance? (not that it is hard....)
(*)actually, even if probate was not done for the pre-deceased spouse it is suprisingly easy. This was the case for my mother (died in 2016, no probate) and I did probate for my father recently. iirc all I had to do was say I wanted to use her allowance and send in her will as well as my fathers.
The difficult/stressful bit for me was actually getting hold of the winchester probate office given they do not answer their phones and took about 4 months to sort things out.....
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