Retrospective probate

[1nvest]

Situation : Dad died in 2008. Mum now 90 with dementia, still living in the same home since the 1970's. Half of the house value was below the IHT threshold at the time of Dads death, and as I understand it husband to wife transfer was the default position along with assumed transfer of his IHT allowance amount. So no probate was recorded after his death, nor any IHT payments made. Dad made no gifts in the 7 years prior to his death.

I've heard however that for the £650K combined allowance assumed to be available after mum dies is subject to presentation of dads probate, otherwise the allowance is reduced to the single persons £325K amount only i.e. my assumed automatic transfer of dads IHT allowance over to mum following his death appears misplaced.

As their only child I will be the heir to the house, assuming of course a natural sequence order of deaths. I had thought that the £650K allowance would be further uplifted by £175K to a total of £825K and given around a £1M estate value might involve £175K x 40% IHT = £70K IHT payment. But without dads probate might involve £325K allowance + £175K for passing property value to a child (me), leaving £500K x 40% = £200K IHT payment.

Is is absolutely required to have a probate certificate for dad in this case?
If so is it possible to file for probate retrospectively after so many years (death in 2008)?

Any pointers to a good solicitor for such matters in the SW19/Sutton area?

[Clitheroekid]

Did your parents own the house in joint names as joint tenants?

Did your father have any significant assets in his own name, and if so, what was the approximate value of such assets at the date of his death?

[1nvest]

Other than the house value, just modest/small bank deposits in both their names. So no, no other significant assets owned by him alone.

I recall that they went to a Trust Matters session back in 2000 or so who wrote their wills and set up powers of attorney paperwork etc., and I don't know whether they left ownership of the property as joint tenants or whether it was split into tenants in common. I have a feeling that it might have been modified to tenants in common with the first to die leaving their half to me or suchlike as part of "IHT planning".

I can't find any of the paperwork/documents and with mums dementia not helping in that respect. I can't rummage either without causing her upset (even a telephone ring or doorbell can trigger a panic attack). But feel its something I should be getting sorted sooner rather than later.

[1nvest]

I suspect the Trust Matters advice may have backfired and instead of mitigating taxation actually have increased it.

If as I believe may be the case the property was split into two separate halves, in each of their separate names, and simplifying to £1M total estate value and that being pretty much it all, then as I see it £500K mums half incurring a 40% IHT liability against the £175K amount above the £325K IHT allowance (maybe with a 10% reduction for 'selling a part of property' type discount, but that aside around a £70K IHT bill amount); Along with £500K CGT liability for the half in effect left to me upon sale (18% rate being a basic rate taxpayer) £90K CGT tax amount. Combined £160K or thereabouts.

Whereas if things had been left alone, joint tenants, mum would have inherited the whole IHT free and upon her passing had combined £650K allowance along with £175K allowance for passing a property to a child, £825K allowance, leaving £175K taxed at 40% (£70K IHT bill).

I'm pretty much providing quite intensive care for mum at present, but can't actually stay with her (we live close to each other such that dropping in 8 times/day or so). I can foresee a time when she will have to go into a care home and her home being sold to cover the costs (a neighbour with similar dementia conditions a year or so ago was paying £85K/year for such care). I could fund such care myself, at least for a handful of years or so that I suspect might outlive her, but suspect that might make taxation issues worst still.

[DrFfybes]

I can't find any of the paperwork/documents and with mums dementia not helping in that respect. I can't rummage either without causing her upset (even a telephone ring or doorbell can trigger a panic attack). But feel its something I should be getting sorted sooner rather than later.

Definitely sooner rather than later.

I suspect the Trust Matters advice may have backfired and instead of mitigating taxation actually have increased it.

Possible. MrsF's parents did similar in early 2000s, mirror wills, leaving everything in Trust to each other and then to the children. When they finally died, 4 days apart, we still had to set the Trusts up and then close them.

The transferable NRB is form IHT402, have you had a look at it and the note? The helpline are very good if you have any questions.

Have you contacted the people who wrote the will him, they may well still have a copy, or have registered it with one of the organisations that hold these things. If you can find your mum's will then odds are they were both the same. Do they have a firm of solicitors they used to use regularly who may have a copy?

Just a thought - the land Registry search (costs £3) should show any change in ownership of the property, but I don't know if it showed how it was held (joint or in common). Bank statements from the time might give a hint.

When your father died, then unless everything was in joint names, something must have happened to transfer the assets to your mum. Someone needed to provide evidence that she (and not someone else) was entitled to the money. They needed to see the will. Someone may still have copies.

Paul

[1nvest]

Just a thought - the land Registry search (costs £3) should show any change in ownership of the property, but I don't know if it showed how it was held (joint or in common). Bank statements from the time might give a hint.

Thanks Paul

Found this : https://mindatrest.co.uk/blog/how-to-te ... in-common/

If the property is registered you will know that the owners are tenants in common because there will be a restriction registered in Section B Proprietorship Register that states:

RESTRICTION: No Disposition By A Sole Proprietor Or The Registered Estate (Except A Trust Corporation) Under Which Capital Money Arises Is To Be Registered Unless Authorized By An Order Of The Court’.

This restriction alerts a Solicitor or Conveyancer to the fact that the owners are tenants in common and one of them alone cannot sell the property.

Looking even more like a nightmare. May have to set up a trust briefly just to comply with getting things rearranged, and perhaps incur taxes for putting assets/capital in and then near instant closure along with taxes on that again

[gryffron]

AIUI You cannot transfer property without a grant of representation. Which means if there was any situation other than joint ownership then grant of representation must have been given.

Though, I am still interested in your original question of whether Grant of Representation is absolutely necessary to claim brought forward NRBs, as that applies to my own parents. And would apply to many couples holding property jointly.

Half of the house value was below the IHT threshold at the time of Dads death, and as I understand it husband to wife transfer was the default position along with assumed transfer of his IHT allowance amount.

Not quite true on either count. In England, Dad can leave his property (or share of it) to whoever he likes. Spouse only transfers the LEFT-OVER part of his allowance(s), not necessarily all of it.

IF dad left his share to spouse (either by joint ownership or will or intestacy) then it is exempt from IHT and ALL his allowance, BOTH personal NRB and property RNRB, can be "brought forward" from dad's death. Potentially giving mum up to 200% of NRB and 200% of RNRB = £1M total allowances.
IF the property was transferred to you/trust on the first death then this will have "used up" some of one or both allowances, meaning mum has much less available now. But she'd also have less estate to distribute.

It's clear the first step here must be to establish who owns the property right now. Spend that £3!

Gryff

[1nvest]

Already did, pretty much as soon at the option came to my notice. Yes its tenants in common (mum and dads names still as before) and I can't find any probate documentation at mums (and asking her is pretty uninformative) so looks like simply nothing was done in that respect following his death.

It looks however that retrospective probate is relatively straight forward other than having to find all the paperwork for property value, bank accounts ...etc. at the time. Relatively simple in their case as they've been life long Halifax savings book type savers and I think I know where the older (filled) books are filed.

The Will is a problem. Can't locate that at all in the most likely places it might have been filed. However its pretty much the same as if the default intestacy were applied, I have suspicions that some years after attending a Trust Matters open day back in 2000 and 'signing up' to their sales pitch that dad had a 'rubbish/rip-off' attitude to that and may very well have destroyed that Will/documentation. Either way it looks like similar albeit different documents that need to be completed/posted for probate.