Probate queries - tenants in common

[buckeejit]

My mum died in Dec 21 & dad died last month. Just found out that probate wasnt done for mum & wondering if its too complex to complete myself rather than paying solicitor 1%+VAT for each estate. Or can I pay by the hour to clarify my thinking and ask a few queries.

Here's what I have as a summary & list of questions. Would be most grateful if anyone knows the answers or could suggest if this is still straightforward enough to tackle myself. PArents had all paperwork together and accessible. Estimate house to be worth £300k at all valuation dates, mum sole accounts total £7k & joint accounts maybe £50k. Thanks in advance for any assistance

Parents estate
01.03.16 – Gifted £30k each to 4 children
25.07.17 – House transferred to tenants in common.
parents-25% each, 4 children – 12.5% each
VALUATION OF HOUSE needed JULY ’17 -

29.12.2021 – mum died
VALUATION OF HOUSE needed JAN
’21 -

Assets/values to be included for mum's estate for IHT purposes :
at Date of Death – 25% of house value as tenant in common share
value of 100% of cash gifts to children in 2017 – not 50% as half from dad? Is it possible to deduct the £3k cash allowance from each £30k gift?
youngest dc didn’t receive cash directly - £30k reduction in purchase of parents' previous house which would make it up to market value.
Should we just treat as £30k gift?
Value of 50% of house value (portion gifted to children) – not 50% of that as half from dad?
Bank accounts solely in her name, (not joint bank accounts)

Is nil rate band only for excepted estates for deaths after 01.01.2022?

Forms to complete
for mum's estate
NIPF1 (we're NI so slightly different form)
IHT400
IHT403

Should we use the following?
IHT436 – use nil rate band
IHT404 – jointly owned
IHT406 – sole name accounts
IHT408 – donate furniture to charity
04.02.2023 – dad died
VALUATION OF HOUSE FEB ’23 needed -

Any % of unused IHT allowance for mum can be transferred to dad?

When house/land disposed of, capital gains tax to be calculated as difference between 50% of valuation from 2017 to 50% of sale price.
If land registry redrawn (for separation of house and creation of site on land beside), can/should we add the 4 spouses as tenants in common to spread CGT liability and utilise their allowance?

Any extra considerations other than added value if land separated from house for another site & sold off with planning permission?
Or retained by children?
Does probate for mum need to be completed before beginning probate for dad?

This is too complicated for a message forum. You need to check there isn't a reservation of benefit in the percentages of the house given to the children if they didn't occupy the house with the parents. You can pay for some advice and ask for a fixed fee.

That's good to know thanks @plumfy (there was a reservation of benefit as parents lived in the house & no dc did). Parents wills just left everything to each other, then split between dc.

So, if I showed this list of queries to a solicitor, would they then be able to state approx what their fixed fee would be & also if there's other aspects I've not considered?

What did you do in the end?
I'm going through a not dissimilar situation. I read up on all the forms (. . . yes, ALL those forms) and also trawled through various helpful websites. I have to say it was a complicated estate with various properties and a business to consider too. I can handle a challenge and thought I was on top of it all and well able to sort it out myself. It took many weeks to get to that position. I then went to see the solicitor who was named as co-executor, with a view of me going it alone. They weren't happy. My initial thoughts were that they were just holding onto the business. I didn't commit either way and, thankfully, didn't burn any bridges. I went away and started gathering the estate information and filling in the forms and soon realised that the input of a professional is essential especially when liable for Inheritance Tax and dealing with H MRC.
A different matter maybe for straightforward estate.
In any case, the cost of the solicitor is only going to cost you personally a proportion of the bill relative to the estate, ie the bill is effectively split between the beneficiaries. They will be thankful for a smoother administration.
I will add that my solicitor picked up on a couple of very useful savings that I had initially somehow missed or just wasn't aware of. I didn't tell them, but they saved me their bill many times over.

@Albertina1 thanks for your response - sorry I'm only seeing it now. We're not any further forward. There are a couple of companies in England that specialise in low cost probate but they don't cover NI sadly.

I'd prefer a flat fee for dealing with it as other than the tenants in common part, it's a fairly standard estate, maybe £400k total so I'm fairly convinced there should be no IHT to pay. I've emailed a few solicitors to see if anyone will do this. One response so far says they only do everything & it's a % fee. Going to read over the forms again now. Appreciate your response!

@buckeejit try the MSE forum as they are really knowledgable. https://forums.moneysavingexpert.com/categories/deaths-funerals-probate

You seem to have a good grasp of what is required and I see no reason why you can’t do this without a solicitor. The MSE forum can help with your questions as you work through the forms.

You have got gifts within 7 years including % of property, but seem to have good records.

If you feel you need a solicitor I would work through the forms, get all the paperwork and just pay them to double check. You will have to do most of the work yourself anyway.

Your Mum should have IHT NRB £325k plus RNRB of up to £175 k, the RNRB is dependent on the house valuation. Any unused NRB and RNRB can be transferred to your Dad’s estate. Your Dad will have the same so if you estimate the estate is c£400k including gifts in the last 7 years then there will be no IHT.

However, you and your siblings will have to pay CGT on the increase in the house value since 2017. You will each have an annual CGT allowance and can use more than one years allowance. https://www.gov.uk/capital-gains-tax

You can get a RICS surveyor to give a value in 2017, at date of Mum’s death and then at date of Dad’s death.

Sorry for your loss.

I’m doing this on my own. The forms are complex and not straightforward, but I think we are nearly there with the IHT papers. There shouldn’t be any tax to pay for us. The IHT helpline were really helpful and the most helpful things they told me were: if there is a property involved, you must fill in the IHT forms regardless of whether you think you are going to be under the threshold or not, and never send any original documents to HMRC as they will either destroy or lose them. We’re hoping to send the paperwork in this week and then apply for probate online. It hasn’t been easy, due to my Mum having bits of money squirrelled away all over the place in multiple bank accounts.

@buckeejit Make sure you take a copy of all documents sent to Probate Office.

@Foreversearch thanks so much, I will check out MSE. What you've said is what I'd expected so really good to have my thinking confirmed. Much appreciated!