Accuracy of valuations for Probate.

[DrFfybes]

Background....
Mum went into a care home in August, and we were selliing her flat (her only property for the last 10 years) under PoA. Last weekend she passed away, so obviously the sale is on hold until we get Probate.

Mum had simple assets - life policies with LV and Pru, an Interactive Investor ISA, a current account, and the flat. The flat is going through at £170k. All her other assets total adequately under her IHT NRB. There are 2 small legacies to charities, the rest split between me and my sister. No gifts over her allowance in the last 7 years. The Life policies are not in Trust.

I have the 'meeting' with the registrar this afternoon to get the Death Cert, which means I can then get final valuations from the Institutions, however this could take 2-3 weeks.

I have an ISA valuation from last week when she took a turn for the worse and with-profits life policy valuations within the last 6 months, so wondered if it was permissible to submit application for Probate with these figures in order to spped things up and try and salvage the property chain.

I understand there is no IHT to pay as her flat is under the RNRB, and I don't need to transfer dad's unused NRB from 2009

I'm still getting my head around the requirements and forms, but as we want don't need transferrable NRB (IHT217) but still want to use the RNRB, does this mean we need IHT400, or can it all be done with IHT 205 (possibly plus IHT435)?

Thanks

Paul

"Dear Mr Hart-Davis. You said on TV "Tax doesn't have to be taxing.I wonder if I could have a few minutes of your time......"

[Dod101]

Background....
Mum went into a care home in August, and we were selliing her flat (her only property for the last 10 years) under PoA. Last weekend she passed away, so obviously the sale is on hold until we get Probate.

Mum had simple assets - life policies with LV and Pru, an Interactive Investor ISA, a current account, and the flat. The flat is going through at £170k. All her other assets total adequately under her IHT NRB. There are 2 small legacies to charities, the rest split between me and my sister. No gifts over her allowance in the last 7 years. The Life policies are not in Trust.

I have the 'meeting' with the registrar this afternoon to get the Death Cert, which means I can then get final valuations from the Institutions, however this could take 2-3 weeks.

I have an ISA valuation from last week when she took a turn for the worse and with-profits life policy valuations within the last 6 months, so wondered if it was permissible to submit application for Probate with these figures in order to spped things up and try and salvage the property chain.

I understand there is no IHT to pay as her flat is under the RNRB, and I don't need to transfer dad's unused NRB from 2009

I'm still getting my head around the requirements and forms, but as we want don't need transferrable NRB (IHT217) but still want to use the RNRB, does this mean we need IHT400, or can it all be done with IHT 205 (possibly plus IHT435)?

Thanks

Paul

"Dear Mr Hart-Davis. You said on TV "Tax doesn't have to be taxing.I wonder if I could have a few minutes of your time......"

I can't tell you which forms you need but of course the NRB is applied to the entire estate not just her flat, less any debts at the time of death plus the funeral costs. If that still leaves the estate under the NRB then that simplifies things for you.

Dod

[DrFfybes]

Hi Dods,

the Estate is circa £300k excluding the flat, so adding the flat takes it over the Personal NRB, hence the need to use the RNRB. Dad used most of his NRB when he died in 2009, as his will was written before the NRB was able to be transferred between spouses, so transferring his unused portion wouldn't cover the flat.

Paul

[fisher]

When I had to deal with a death back in 2017 the with profit life companies were quite happy to give a valuation at the date of death over the phone when you rang their Bereavement phone lines. They then followed this up with a written statement. I would try that rather than use months old valuations.

Ring them up after you've got the death certificate. I got 6 copies of the death certificate so I could send one out in the post to anyone who needed one and deal with multiple companies at once. I did the same with the probate certificates and ordered 6.

[Adamski]

The valuations should be the date passed away. For investments they'll want death certificate by post and written request for valuation. Yes it's slow and annoying as some can be slower than others, but that's the system, so get accurate figures rather than estimates.

[DrFfybes]

Thanks, as it happens Pru sent the life policy valuation with the claim form, Interactive Investor were great, RBS, less so, and LV wouldn't reveal the mystery prize value until I sent the application form back to cash it in, along with the death cert and grant of probate.

I called LV and politely pointed out that I couldn't get probate without the valuation, as if it was £400k then there would be a very different process than if it was £40k, and after checking with a colleague the amount was revealed (about £700 more than I'd estimated).

It is really strange how some companies equire an original Death Cert posted to them, some want a certified copy of the Will (even after Probate is granted, presumably to prove I am an executor?), and others are happy for you to scan the docs in and upload them to their website. Oh yes, and one asked if I had PoA. I decided to let that one slide.

At least I already have a Government Gateway account, although as it is for Self Assessment I'm not holding my breath it will work for IHT

Paul

[Clitheroekid]

I'm still getting my head around the requirements and forms, but as we want don't need transferable NRB (IHT217) but still want to use the RNRB, does this mean we need IHT400, or can it all be done with IHT 205 (possibly plus IHT435)?

You can only use the IHT205 if the estate is an `excepted estate'. This requires both of the following conditions to apply:

1. The gross value of the estate is less than twice the applicable IHT nil rate band (i.e. less than £650k)

2. 100% of the unused nil rate band from your father can be transferred to your mother

There seems to be no provision for a situation where you're not claiming the transferable NRB and wish to claim only the Residential NRB, but as you can't comply with the second condition it seems to me that you will have to complete an IHT400 and the relevant schedules.

In theory, you could just submit the IHT205 and rely on the fact that there is no specific requirement to claim the RNRB, as it should be applied automatically - https://www.gov.uk/hmrc-internal-manual ... /ihtm46004 However, I suspect that as soon as the IHT205 arrived it would be automatically rejected, and you would then have to spend potentially months arguing the toss, so that it would just be quicker to complete the IHT400 in the first place.

You could always try ringing the helpline, which is actually quite good - 0300 123 1072.

So far as the accuracy of the valuations is concerned then from a probate point of view they're not that important if the estate is not taxable, and although you should attempt to get exact figures estimates can be used if getting exact figures is going to cause a delay.

Where exact figures aren't possible, e.g. for a house, then it's generally better to overestimate the value (provided, of course, this doesn't take you over the threshold). This is because the value that's reported forms the baseline for any CGT calculations that may be due in the future, so the higher the better.

If the estate is below the threshold there's rarely any point in paying for a valuation of anything, as there's now so much publicly available information available. This is a massive change from when I qualified - in those dim and distant days we would routinely instruct stockbrokers to carry out a formal written valuation of the deceased's shareholdings, for which they charged something like 1% of the value, a very nice little earner!

[DrFfybes]

In theory, you could just submit the IHT205 and rely on the fact that there is no specific requirement to claim the RNRB, as it should be applied automatically - https://www.gov.uk/hmrc-internal-manual ... /ihtm46004 However, I suspect that as soon as the IHT205 arrived it would be automatically rejected, and you would then have to spend potentially months arguing the toss, so that it would just be quicker to complete the IHT400 in the first place.

Thanks CK - that was what I'd eventually figured out.

Also got proper figures from 3 of the 4 accounts anyway, just RBS that seem to be going out of their way to avoid telling me anything.
As the flat is under offer anyway that seems a pretty solid valuation.

A lot of IHT400 doesn't apply, so far got to Q30, 'lifetime gifts'. Mum moved to her current flat in 2010 and gave us the excess cash from her house sale, circa £180k between us. I was surprised to discover they seem to want to know about this. Might try that helplne after all

Paul