Inheritance tax forms

[melonfool]

Hi all

I have asked an accountant to to help me do the inheritance tax forms for my mum's estate.

I knew it would be a pain, there are 9 forms to be completed, but I thought that having her sort out what was required would help. Unfortunately it's been a royal pain.

But, anyway....

My dad died in 2020, mum did his probate, no IHT. The accountant is asking me for the value of his estate, for some reason she won't take this from the probate forms I have sent her. She says I need to add up the value of his assets and deduct any liabilities. But I have no records at all of all this. Mum did the probate and I thought that was that. The accountants says:"


"This can be found by using either:

a. The value of the estate in your dads will or -
b. Adding all assets on his death less liabilities"


Do I really need this? Do people really have the value of their estate in their will, you'd need to change it daily! (she ahs the will anyway)

She also wants to know the value of the marital home when dad died - I didn't get it valued, why would I? It was in joint names so automatically went to mum and there was no IHT to pay so why would it be valued? Do I really need this?

She also wants me to put a value on all mum's personal possessions and furniture. This is quite frankly impossible. Partly because I have given it all away, partly because it's a load of old tat. When I read the forms I thought they said you only have to declare any individual item over £1,500, there is definitely nothing like that. Do I really need to try and value 15 jumpers with moth holes in and 10 Louis Armstrong LPs?

thanks

Mel

[Seasider]

When I did my mother's probate and IHT calculations I used the probate figure for my father's estate. So I certainly hope that was the right figure to use. You also have to submit a copy of the grant of probate for your father with the IHT form for claiming the unused nil rate band. If you use different figures on the form from those shown on the grant I imagine that would raise questions from HMRC.

I have never known a will to give a figure for the value of an estate - perhaps the accountant has been reading too much Agatha Christie.

I believe the grant will show a gross value and a net value. I assume the net is after deducting liabilities. I don't think you need to be second guessing what they were.

May I ask why you went to an accountant? I always thought you would use a solicitor for dealing with probate (usually the same one who drew up the will)

[Seasider]

Ah I have just noticed a difference between my situation and yours. When my father died my parents did not own a house - they were tenants. I suppose that might have an impact.

[DrFfybes]

May I ask why you went to an accountant? I always thought you would use a solicitor for dealing with probate (usually the same one who drew up the will)

When mum died I went to one of those form filling companies.

As there was no IHT and I'd had PoA for years, it was relatively simple and low risk of any real questionning.

There was a lot of bits of form I wasn't sure about, but they seemed to have a pragmatic approach to what was required and it was rather quick and simple.

I suspect if IHT was due then it might have been different, which ISTR might be the case for Sunnypad?

But re possesions and furniture, I've seen a nominal figure of £1500 used for both our parents (and MrsF's had IHT to pay) as generally you're lucky if you get the house cleared for free a lot of time and how exactly do you value 23 tins of short date condensed milk and 14 cans of carpet cleaner foam?

Paul

[Gerry557]

Hopefully mum kept some sort of record of dads passing. Probably in a box in the loft or such like. I cant remember how long you are supposed to keep things like that but I have now acquired a couple of said boxes. This might help your situation if you can find it.

Wills dont normally state values, how could they especially if written decades ago. Do you have a magic house price calculator??

You might be able to do an educated guess of assets and liabilities and use websites to back date the house values etc

As for mum's personal possessions and furniture. I think you just covered it, because I have given it all away, partly because it's a load of old tat. Often people pay a charity to house clear so there valuables might be a minus number. It costs £1k - £500 although it might be less if there were some thing that did have any residual value.

Sorry for your loss.

[melonfool]

Thank you all - I have got all of mum's paperwork (having an enormous house they did not really use the loft(s), nor the cellar).

There isn't any paperwork 'for dad' because almost everything was joint, until it wasn't. I have the grant of probate, which I have given to the accountant. He had zero liabilities but there might have been, I dunno, something that had been overpaid to him, but I don't have those records at all.

But really, I'm not sure the house value is at all important (though I expect mum did include it on the form, which she probably should not have done) as the house passed directly to her.

I am not using an accountant for probate, I am using them for inheritance tax - I though tax was what accountants did? I have a solicitor lined up for probate and conveyancing.

I've told the accountant to use £1,000 as the value of possessions. But I am starting to get the impression she doesn't know what she is doing because of the questions she keeps asking me and the time it is taking. I might ask her to just send me what she has and I will do the rest. (even though I might explode if I take on one more job right now, but hey ho!)

Thank you

Mel

[the0ni0nking]

I thought tax was what accountants did?

No, accountants do a whole raft of stuff related to financial matters - and I suspect only a small proportion are well versed in respect of IHT. Same applies to many "professional fields such as engineers, lawyers etc.

I'm an accountant - and I would never hold myself out to be an IHT specialist.

It's not clear from your initial post whether you asked the accountant whether they were familiar with the IHT processes (although if they are part of even a small sized practice they should likely be able to call on someone who is to assist and stop some of what I feel are nauseating questions focussing on irrelevant parts of the wider issue you wish to resolve.

It may be that you are close to resolving all the issues you've encountered - but my interpretation of it would be that any accountant who professed to be knowledgeable in IHT would be taking a much more pragmatic approach to things than yours. Yes, we need documents but we don't need minutiae as it's not going to materially change the circumstances. Clearly, that is of no help to you currently.

If it were me, I suspect from the information available would be a strongly worded email expressing a desire to see some progress and quickly.

[Oswulf]

When your father died I presume your mother will have completed the inheritance tax forms (IHT400 series) before applying for probate. Is there any chance they're still knocking around?

That said, I went through the same process last year, my father having died a few years previously. I don't recall any information being require about my late father's estate. The only issues relating to him were whether he'd used his NRB and RNRB tax allowances or not.

[Nocton]

I have been following this thread with interest and some surprise.
My wife and I own everything jointly, except ISAs and VCTs and our wills reflect that. So at first death matters should be pretty simple.
Re the use of a solicitor or account for IHT, which will definitely have to be paid on second death, we have always expected that our solicitor, who is named as joint executor with our son, would handle all probate and legal matters for both of us, calling on an in- or out-house specialist for tax matters if required. Keeping it all with the same company for both our deaths should make it easy for our children and the surviving spouse.

[melonfool]

Mum didn't use a solicitor for her will, she used a will writer, so there's no joy going to them.

I've looked at the accountant website, they don't claim to be IHT specialists, but they do mention IHT. I emailed (they do my personal and company tax) to ask if they could do the forms and they says they could. She had two weeks from when they got the stuff but then after the two weeks she had two weeks holiday. Just before her holiday she asked me for a load of stuff which I sent her while she was away. She said she would "make it her priority on her return" on 4th. I emailed her 6th for an update having expected, not unreasonably, to hear from her on 4th. That's when she emailed asking for all this other stuff.

So I kind of feel if she had asked me for everything up front it could be done by now. I also feel like if she knew what she was doing it would be done by now!

I'm going to have a go at doing them myself this weekend and see how hard it is, then dump her if I think I can do them now I've got all the stuff she seems to think I need.

Oh, I have got some forms mum did for dad actually, I noticed I had labelled a folder "dad IHT forms" so there must have been something to go in there, I'll look at them tomorrow.

Mel

[stewamax]

Three rules of thumb:
- the probate registry will not look at a probate application until either the IHT forms have been submitted to HMRC online or on paper (and £all or £part paid), or you declare to the registry that the estate is an 'excepted' estate (no IHT due) in which case there is no need to send anything to HMRC unless the estate is over £3M gross
- probate value is, unsurprisingly, the value of anything that can be left by Will. These are anything solely owned by the deceased and exclude anything jointly owned (a joint bank account; a house as joint-tenant; ...)
- IHT, on the other hand, is levied on sole assets, jointly-owned assets (usually 50%) and shared 'matrimonial' assets (usually 50%: furniture, family car and so on). In other words, if the deceased had a finger in any pie, HMRC will want to tax it.

[kltrader]

Inheritance tax forms are a hassle, especially with your accountant asking for so many details about your dad's estate and the marital home's value. Valuing personal items and furniture sounds like a real headache. Maybe talk to your accountant for a simpler approach.

[scrumpyjack]

The value of personal items is what you can sell them for after the costs of selling - ie virtually nil. As executor I went round a flat photoing all the furniture etc. It was all reasonable quality stuff. Then I got a friend, who is an auctioneer, to value it all. He valued the lot at £150. He said that is all I would get from a house clearance firm! HMRC did not query the valuation.

[Dod101]

The value of personal items is what you can sell them for after the costs of selling - ie virtually nil. As executor I went round a flat photoing all the furniture etc. It was all reasonable quality stuff. Then I got a friend, who is an auctioneer, to value it all. He valued the lot at £150. He said that is all I would get from a house clearance firm! HMRC did not query the valuation.

That is on a forced sale but rather surprises me. When I moved from a large house to the rather smaller one I now live in and had to dispose of a lot of stuff via auction. Whilst I did not get what seemed good value, I got a lot more than £150. It was mostly furniture.

Dod

[Oswulf]

The value of personal items is what you can sell them for after the costs of selling - ie virtually nil.

Indeed. My late mother collected antiques - furniture, ceramics, glassware. Spent tens and tens of thousands of pounds over the years. The professional valuer from a local auction house provided a total valuation of £5,000, and half of that was from a single item. The eventual prices at auction matched the valuation pretty closely.

[Gerry557]

I have been following this thread with interest and some surprise.
My wife and I own everything jointly, except ISAs and VCTs and our wills reflect that. So at first death matters should be pretty simple.
Re the use of a solicitor or account for IHT, which will definitely have to be paid on second death, we have always expected that our solicitor, who is named as joint executor with our son, would handle all probate and legal matters for both of us, calling on an in- or out-house specialist for tax matters if required. Keeping it all with the same company for both our deaths should make it easy for our children and the surviving spouse.

Personally I wouldn't have the solicitor as the executor. Your son could employ the solicitor if needed.

Often the professionals don't know the answers but ask you to supply them then write what you said down. I suppose they might write it in the right box. Granted some estates are more complex that others.

[Seasider]

I think some of these answers explain why the accountant is asking her questions and why you cannot simply use the probate values (as I did). Hopefully the IHT files will have something in them about the house and any other bits which needed a valuation but were jointly owned.

If the file is no help, does something like Zoopla give historic values for houses?? Or could you use the house price index to work back from a current value?

[melonfool]

Three rules of thumb:
- the probate registry will not look at a probate application until either the IHT forms have been submitted to HMRC online or on paper (and £all or £part paid), or you declare to the registry that the estate is an 'excepted' estate (no IHT due) in which case there is no need to send anything to HMRC unless the estate is over £3M gross
- probate value is, unsurprisingly, the value of anything that can be left by Will. These are anything solely owned by the deceased and exclude anything jointly owned (a joint bank account; a house as joint-tenant; ...)
- IHT, on the other hand, is levied on sole assets, jointly-owned assets (usually 50%) and shared 'matrimonial' assets (usually 50%: furniture, family car and so on). In other words, if the deceased had a finger in any pie, HMRC will want to tax it.

Thanks, I know all that. I just don't have the headspace to fill in all the forms right now (of which there are 9, plus the one for the bank).

There is nothing jointly owned at this stage, because dad died 4 years ago, so mum owned everything. I can't imagine how people with even less resources or time than I have get on with this sort of stuff.

Anyway, I found dad's probate forms by mum so I've sent her those figures and it sounds like she's ready to send it back to me now she has those.

I told her to value the possessions at £1,000. If we pay less than £1,000 to get rid of it all I'll be happy enough! My family keep going on about valuing things, getting auctioneers...until I tell them to just let me know how much they get for it, then they go quiet. Like my brother "don't put a lot of effort into it, but it might be worth checking what those Simon and Garfunkle LPs are worth, I saw something online the other day for thirty five pounds!". Me "I'll leave them in the house for when you go, let me know what you get for them". Him "oh, well no, don't worry.....". <eyeroll> I mean, S&G were EXTREMELY popular, there will be a lot of their LPs around, plus it's been played a lot.

I mean, if you want to distract yourself from grief, this is a great way to go about it!

Mel

[DrFfybes]

Like my brother "don't put a lot of effort into it, but it might be worth checking what those Simon and Garfunkle LPs are worth, I saw something online the other day for thirty five pounds!"l

I get that every time I try and take something to the tip or charity. I still have a box of records behind me right now.

My usualy answer is "well you list it on ebay then" which results in it going to charty with Gift Aid and an email from them 8 months later telling us our donations raised 47p or whatever.

At least things are progressing for you now. When MrsF started obsessing about the details of her parents' Estate (pre RNRB so IHT to pay) I kindly pointed out that whatever she saved she would only see 20% of, as would her 2 siblings who did bugger all, and the taxman would get twice as much as any of them.

Don't sweat the small stuff

Paul

[melonfool]

Like my brother "don't put a lot of effort into it, but it might be worth checking what those Simon and Garfunkle LPs are worth, I saw something online the other day for thirty five pounds!"l

I get that every time I try and take something to the tip or charity. I still have a box of records behind me right now.

My usualy answer is "well you list it on ebay then" which results in it going to charty with Gift Aid and an email from them 8 months later telling us our donations raised 47p or whatever.

At least things are progressing for you now. When MrsF started obsessing about the details of her parents' Estate (pre RNRB so IHT to pay) I kindly pointed out that whatever she saved she would only see 20% of, as would her 2 siblings who did bugger all, and the taxman would get twice as much as any of them.

Don't sweat the small stuff

Paul

Cleverly, I get the most!

But of anything I save now, we only see 60% anyway due to the IHT. I then get 33% of that, but no-one else gets more than 14% individually.

I did get a gift aid message saying they had raised £146. But that would have been on clothes and books I think because I took the records later. Someone will pay 45p for those LPs and sell them for £5 at a car boot sale I expect, but still they need £4.55 more than I need the hassle, so I don't care. (I also spend quite a lot of my time telling people that the jobs they see online for double their salary either don't exist or will not actually pay them that salary, and the same goes for this - records online for £35 don't actually sell for £35, someone makes an offer of £2.50 and they accept).

Anyway, the forms are done. I now have to print all 51 pages, post them to my cousin to sign, she then has to send back to me (cannot trust her to send to HMRC) and I need to sign and send to HMRC and do the form for the bank for them to pay the IHT.

Sadly my printer has decided today is one of the very many days when it doesn't want to work (I know how it feels but sadly I can't just hang out in the spare room doing nothing all day).

I've also had a tax rebate from her in the form of a cheque. Sigh.

Mel