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Is it likely that HMRC will allow us to go ahead without a bridging loan to pay the IHT?

(3 Posts)
FlorenceInatemple Fri 28-Mar-14 22:29:10

Would be very grateful for any thoughts on this please.An elderly uncle has died intestate and left a sizeable estate.
A large portion of the estate is tied up in investments which are certified,the remainder is cash/house/posessions.
IHT of approx. £500.000 needs to be paid upfront and a bridging loan to facilitate this has been denied.The solicitor handling this has asked that HMRC make a not unheard of exception and allow us to press ahead with probate without paying the tax upfront and instead paying it as soon as funds are released.
A few questions spring to mind if anyone can help?...(1) why would Nat West (my uncles bank which holds a large account of cash belonging to my uncle) refuse the bridging loan? (2) Is it likely that HMRC will give us the go ahead without payment upfront?(3) What happens if they don't give us the go ahead?(4)How long should the whole thing take to sort ?

poshfrock Tue 01-Apr-14 15:48:19

1. No idea why Natwest would refuse the loan. Is there not sufficient cash in his accounts to pay some or all of the IHT upfront ? I have used Handelsbanken for bridging finance in these scenarios and always found them very helpful.
2.Yes HMRC will alllow a probate application on credit where the assets are illiquid. See link :www.hmrc.gov.uk/manuals/ihtmanual/ihtm38246.htm
3. I think this is unlikely.
4. How long will what take to sort out ? Getting the grant or administering the whole estate ? Getting the grant takes about 2 weeks from making the application ( which itself can take a couple of months to prepare if there are lost of assets which require valuing) but administration can take much longer particularly if assets need to be sold and intestacies are usually more complex then when there is a will. It sounds like a valuable estate. I would suggest 6 months at a minimum and probably more like a year.

By the way on certain assets ( land and buildings mainly but also some shareholdings) then the IHT can be paid in installments over a 10 year period although you will be charged interest.

FlorenceInatemple Thu 03-Apr-14 00:28:16

Thanks poshfrock that is very helpful.We now think the reason for the refusal for no.1 is actually because none of us is resident in the uk .Yes the estate is large (over a million in cash and investments..mostly certified investments).I meant how long would the entire thing take to wrap up ...your estimate is realistic I'd say,that is also what our solicitor has told us.
Thank you for your help.

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