Financial affairs on death
Discussion
My wife's mother passed away between Christmas & New year and now her brother is trying to sort out the affairs. He appears to be getting very stressed over the whole thing. The estate is not substantial but it seems there are a few things that have been done that may or may not complicate it. There are only 2 items:
Now my understanding is that they don't need to seek probate as its below the IHT threshold.. However I assume there must be a CGT liability on the property based on difference in value between when it put into the trust & the value when sold, Would this be correct? And is this tax liability assessed on the trust or on the beneficiaries of the trust?
I'm sure it must be straightforward.
- bank account with about £23k in
- property worth about £290k.
Now my understanding is that they don't need to seek probate as its below the IHT threshold.. However I assume there must be a CGT liability on the property based on difference in value between when it put into the trust & the value when sold, Would this be correct? And is this tax liability assessed on the trust or on the beneficiaries of the trust?
I'm sure it must be straightforward.
My sister just sorted out our mum's affairs after she passed last summer. In all it took a little over 6 months, including selling the house (which went in the first month it was on the market). Total estate value was around the same as yours and there was only the two of us inheriting so it should have been easy. It still had to go through Probate though. I couldn't tell you the wheres and whys as she sorted everything but it definitely had to.
GT03ROB said:
My wife's mother passed away between Christmas & New year and now her brother is trying to sort out the affairs. He appears to be getting very stressed over the whole thing. The estate is not substantial but it seems there are a few things that have been done that may or may not complicate it. There are only 2 items:
Now my understanding is that they don't need to seek probate as its below the IHT threshold.. However I assume there must be a CGT liability on the property based on difference in value between when it put into the trust & the value when sold, Would this be correct? And is this tax liability assessed on the trust or on the beneficiaries of the trust?
I'm sure it must be straightforward.
Not sure if relevent because of the increase is after the property was put in Trust not after death, but selling the property on behalf of the beneficiaries and not the estate could mean each benificiary may be able use their personal CGT allowances (deed of appropriation IIRC) to reduce any tax liability. (% rates & allowance may have changed since I last looked at this)- bank account with about £23k in
- property worth about £290k.
Now my understanding is that they don't need to seek probate as its below the IHT threshold.. However I assume there must be a CGT liability on the property based on difference in value between when it put into the trust & the value when sold, Would this be correct? And is this tax liability assessed on the trust or on the beneficiaries of the trust?
I'm sure it must be straightforward.
I am executor of my late Uncles estate, he died in November.
His is an Excepted Estate which means that probate is not needed & no accounts need to be submitted. In his instance this is because the estate is all in cash, below the IHT threshold, no property involved & everything was bequeathed to his wife.
A more thorough explanation can be found here
https://www.gov.uk/valuing-estate-of-someone-who-d...
His is an Excepted Estate which means that probate is not needed & no accounts need to be submitted. In his instance this is because the estate is all in cash, below the IHT threshold, no property involved & everything was bequeathed to his wife.
A more thorough explanation can be found here
https://www.gov.uk/valuing-estate-of-someone-who-d...
One of our relatives died recently and it feels like a bit of a free for all.
We were talking to the bank and it seems that someone had presented a will but we don’t know who and they won’t tell us.
His girlfriend has taken the car which she said she paid for.
There is this will service online but it seems semi official and you have to pay £70 to search it.
Nobody is really sure if we have to do this probate thing and pay CGT. There’s a property worth £100k and we have the keys, but who is the person with the will and how do we transfer it to us officially?
I’m sure there should be a better process with a national will register as it’s a bit of a shambles at the minute and there isn’t really a clear guide what to do.
I’m not looking for answers as I left them to it, but it’s a bit strange to have such a confusing and loose process.
We were talking to the bank and it seems that someone had presented a will but we don’t know who and they won’t tell us.
His girlfriend has taken the car which she said she paid for.
There is this will service online but it seems semi official and you have to pay £70 to search it.
Nobody is really sure if we have to do this probate thing and pay CGT. There’s a property worth £100k and we have the keys, but who is the person with the will and how do we transfer it to us officially?
I’m sure there should be a better process with a national will register as it’s a bit of a shambles at the minute and there isn’t really a clear guide what to do.
I’m not looking for answers as I left them to it, but it’s a bit strange to have such a confusing and loose process.
Edited by muscatdxb on Friday 31st January 13:58
GT03ROB said:
The complication (I think) is that the property was put into trust in June 2014 with the 3 kids as beneficiaries, but MIL retained a lifetime interest to reside there. Their intent is just to sell the property.
However I assume there must be a CGT liability on the property based on difference in value between when it put into the trust & the value when sold, Would this be correct? And is this tax liability assessed on the trust or on the beneficiaries of the trust?
I'm sure it must be straightforward.
Yes and no. However I assume there must be a CGT liability on the property based on difference in value between when it put into the trust & the value when sold, Would this be correct? And is this tax liability assessed on the trust or on the beneficiaries of the trust?
I'm sure it must be straightforward.
If as part of the trust the MIL was permitted to live in the home rent free then Principal Private Residence Relief may be applied and no CGT should be chargeable on the increase during the time she lived there.
If not, it would be based on the value now, less the value at time of trust establishment.
Need to check on the wording of the trust documents to be sure.
To add - any CGT payable would be the responsibility of the trustees of the trust and this would be payable prior to distributing the proceeds to the trusts beneficiaries. Also, the trust would only get one lot of £3000 CGT allowance, not one for each beneficiary.
This being based on the home being sold after entering the trust which is usually the case upon the passing of the asset into trust at time of death.
Edited by lenny007 on Friday 31st January 14:08
Edited by lenny007 on Friday 31st January 14:09
lenny007 said:
Yes and no.
If as part of the trust the MIL was permitted to live in the home rent free then Principal Private Residence Relief may be applied and no CGT should be chargeable on the increase during the time she lived there.
If not, it would be based on the value now, less the value at time of trust establishment.
Need to check on the wording of the trust documents to be sure.
To add - any CGT payable would be the responsibility of the trustees of the trust and this would be payable prior to distributing the proceeds to the trusts beneficiaries. Also, the trust would only get one lot of £3000 CGT allowance, not one for each beneficiary.
This being based on the home being sold after entering the trust which is usually the case upon the passing of the asset into trust at time of death.
Ok. My BiL is sending me a copy of the trust document, but my understanding is that she had the right to live there under the trust. She lived there until about 2 or 3 years ago. So on this basis would the start point for CGT be when she left there?If as part of the trust the MIL was permitted to live in the home rent free then Principal Private Residence Relief may be applied and no CGT should be chargeable on the increase during the time she lived there.
If not, it would be based on the value now, less the value at time of trust establishment.
Need to check on the wording of the trust documents to be sure.
To add - any CGT payable would be the responsibility of the trustees of the trust and this would be payable prior to distributing the proceeds to the trusts beneficiaries. Also, the trust would only get one lot of £3000 CGT allowance, not one for each beneficiary.
This being based on the home being sold after entering the trust which is usually the case upon the passing of the asset into trust at time of death.
Edited by lenny007 on Friday 31st January 14:08
Edited by lenny007 on Friday 31st January 14:09
muscatdxb said:
One of our relatives died recently and it feels like a bit of a free for all.
We were talking to the bank and it seems that someone had presented a will but we don’t know who and they won’t tell us.
His girlfriend has taken the car which she said she paid for.
There is this will service online but it seems semi official and you have to pay £70 to search it.
Nobody is really sure if we have to do this probate thing and pay CGT. There’s a property worth £100k and we have the keys, but who is the person with the will and how do we transfer it to us officially?
I’m sure there should be a better process with a national will register as it’s a bit of a shambles at the minute and there isn’t really a clear guide what to do.
I’m not looking for answers as I left them to it, but it’s a bit strange to have such a confusing and loose process.
If a will has been presented then presumably it also names the Executor /s whose role it now is to sort the estate out so no doubt they will be in touch with you ?We were talking to the bank and it seems that someone had presented a will but we don’t know who and they won’t tell us.
His girlfriend has taken the car which she said she paid for.
There is this will service online but it seems semi official and you have to pay £70 to search it.
Nobody is really sure if we have to do this probate thing and pay CGT. There’s a property worth £100k and we have the keys, but who is the person with the will and how do we transfer it to us officially?
I’m sure there should be a better process with a national will register as it’s a bit of a shambles at the minute and there isn’t really a clear guide what to do.
I’m not looking for answers as I left them to it, but it’s a bit strange to have such a confusing and loose process.
Edited by muscatdxb on Friday 31st January 13:58
Actual said:
I am not an expert...
It may be possible to avoid probate if the institutions involved such as banks do not require probate.
If transferring or selling a property it is likely that either a buyer or seller solicitor would require probate before dealing with the transaction.
The bank where the money is held do not require probate. Good point though that a solicitor may despite falling beneath the IHT threshold.It may be possible to avoid probate if the institutions involved such as banks do not require probate.
If transferring or selling a property it is likely that either a buyer or seller solicitor would require probate before dealing with the transaction.
muscatdxb said:
One of our relatives died recently and it feels like a bit of a free for all.
We were talking to the bank and it seems that someone had presented a will but we don’t know who and they won’t tell us.
His girlfriend has taken the car which she said she paid for.
There is this will service online but it seems semi official and you have to pay £70 to search it.
Nobody is really sure if we have to do this probate thing and pay CGT. There’s a property worth £100k and we have the keys, but who is the person with the will and how do we transfer it to us officially?
I’m sure there should be a better process with a national will register as it’s a bit of a shambles at the minute and there isn’t really a clear guide what to do.
I’m not looking for answers as I left them to it, but it’s a bit strange to have such a confusing and loose process.
If a will has been presented then presumably it also names the Executor /s whose role it now is to sort the estate out so no doubt they will be in touch with you ?We were talking to the bank and it seems that someone had presented a will but we don’t know who and they won’t tell us.
His girlfriend has taken the car which she said she paid for.
There is this will service online but it seems semi official and you have to pay £70 to search it.
Nobody is really sure if we have to do this probate thing and pay CGT. There’s a property worth £100k and we have the keys, but who is the person with the will and how do we transfer it to us officially?
I’m sure there should be a better process with a national will register as it’s a bit of a shambles at the minute and there isn’t really a clear guide what to do.
I’m not looking for answers as I left them to it, but it’s a bit strange to have such a confusing and loose process.
Edited by muscatdxb on Friday 31st January 13:58
GT03ROB said:
The bank where the money is held do not require probate. Good point though that a solicitor may despite falling beneath the IHT threshold.
If the bank accounts don't hold significant amounts then probate may not be needed by the bank.According to Google (which matches my experience)...
The probate threshold for NatWest is around £25,000. However, NatWest can request a grant of probate even if the estate value is below this threshold.
Barclays' probate threshold is £50,000. This means that if a deceased person had more than £50,000 in sole accounts with Barclays, probate will be required.
NS&I. We may ask for this if the customer's total NS&I savings are £5,000 or over.
My father passed away on 9th Jan and on the face of it, his affairs are fairly straightforward - mum still lives in the house and passes to her in the will
Only sticking point is that he had a sole ISA with Monmouth building society and it seems the value. Is over their requirement for probate
Is it the case that individual institutions can set their own rules?
Only sticking point is that he had a sole ISA with Monmouth building society and it seems the value. Is over their requirement for probate
Is it the case that individual institutions can set their own rules?
CalNaughtonJnr said:
My father passed away on 9th Jan and on the face of it, his affairs are fairly straightforward - mum still lives in the house and passes to her in the will
Only sticking point is that he had a sole ISA with Monmouth building society and it seems the value. Is over their requirement for probate
Is it the case that individual institutions can set their own rules?
As I understand it, yes (IANAL, just read the guidance).Only sticking point is that he had a sole ISA with Monmouth building society and it seems the value. Is over their requirement for probate
Is it the case that individual institutions can set their own rules?
My sister applied for probate for my mum (a very simple estate) last week and received an 'approved' email within a couple of days - which was astonishing. Letters of administration to follow within 10 working days.
monthou said:
CalNaughtonJnr said:
My father passed away on 9th Jan and on the face of it, his affairs are fairly straightforward - mum still lives in the house and passes to her in the will
Only sticking point is that he had a sole ISA with Monmouth building society and it seems the value. Is over their requirement for probate
Is it the case that individual institutions can set their own rules?
As I understand it, yes (IANAL, just read the guidance).Only sticking point is that he had a sole ISA with Monmouth building society and it seems the value. Is over their requirement for probate
Is it the case that individual institutions can set their own rules?
My sister applied for probate for my mum (a very simple estate) last week and received an 'approved' email within a couple of days - which was astonishing. Letters of administration to follow within 10 working days.
Pigs to deal with, I've vowed to clear any NS&I accounts before I pass.
Edited by Huzzah on Saturday 1st February 11:46
GT03ROB said:
Ok. My BiL is sending me a copy of the trust document, but my understanding is that she had the right to live there under the trust. She lived there until about 2 or 3 years ago. So on this basis would the start point for CGT be when she left there?
Apologies for the delay in replying but yes, i believe that would be correct.A few people on here commenting on "probate thresholds".
There is no legal limit for probate in this country. Individual financial institutions may set a limit of anywhere between £5,000 and £50,000 however.
And yes, NS&I seem to be particularly determined it's required if the holding is anywhere over £5K
There is no legal limit for probate in this country. Individual financial institutions may set a limit of anywhere between £5,000 and £50,000 however.
And yes, NS&I seem to be particularly determined it's required if the holding is anywhere over £5K
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