Probate advice at the end of our tether

[probatepurchase]

We are the bottom house in a chain of 3 houses. The owner of the top of the chain has died in April 24, and so we are waiting for probate to be granted. Apparently it's with HMRC to wait for a code to be released and there is talk of an inheritance tax 'cheque'.

The information we have is from the lady we are buying from.

We are going to lose our buyer if we don't complete within 2-3 weeks.

Does anyone understand what the above means and, if our timescale of 2-3 weeks is realistic?

If the form was submitted in April, then there is a good possibility that it could be approved in the next few weeks. Both my father’s and my friend’s father’s probate took ten weeks (one a complicated estate, the other easy. It took six months to get all the info for the form ready on the complicated estate before applying for probate).

Took us 2 months to get the code- they claimed to have posted after a month but went mysteriously missing! We've just submitted the application and min wait time is 16 weeks. We're not optimistic! We are definitely waiting before putting house on the market.

I recently did the probate application for my late mother. Her estate was below the IHT threshold, so no IHT forms to submit to HMRC and therefore no Code to obtain or tax to pay. It was a simple estate with only 3 beneficiaries but still took 16 weeks after HMCTS had received my application.

We took a chance and put her property up for sale six weeks after HMCTS had received the probate application. Luckily, probate was granted before we had reached the point of exchange so there were no delays for the buyer, but it could easily have caused delays if the application for probate had been stopped (queried) and/or further information needed. I did keep the buyer/EA/Sol up to date with progress just to keep them all onside.

I'm sorry to say that it was very unlikely that probate was applied for in April. It sounds as though they submitted the IHT400 to HMRC together with the supplementary forms and have now paid the IHT due and are waiting for the Code, so they can submit with the probate application to start the actual probate process.

For clarification, the house was already on the market when the elderly gentleman passed away

The annoying thing is, it's not even the house we have bought: it's the next house up the chain, but it's having such a knock on effect,

Think I have accepted that we will lose our buyer and have to sell our house again.

I know it's first world stuff but we have put our life on hold since April, thinking we could be moving imminently, it seems that we won't be and we are just really sad in all honesty as it's the house of our dreams and we can't find anything else like it near the same price

Also to clarify I don't want to sound insensitive as someone has died here, just keeping this business

So why not push the issue onto your vendors?

If they want to sell their house to you, give them the deadline and ask them to meet it. They can rent.

I think you are taking too much of this as your problem. You sell to your buyers, you buy from your vendors. If they then can't buy the probate house, its not your problem.

They will either proceed on the sale to you or they wont.

They have a cheap mortgage rate and need to port their mortgage in order to keep that rate

I do agree with this we are having to take this on though as we aren't getting clear information

The problem with all property chains is that you are at the mercy of everyone within it.

Probate sales then add time into the equation. As others have suggested it’s best if your solicitor tries to ascertain facts but it’s not even that simple for them as it’s one link above your direct purchase so they’re not in contact with the relevant solicitor.

Even fairly straightforward sales and purchases take a good 12 to 16 weeks on average. Good luck.

Thank you and it's so true

We had our offer accepted in February so it's dragging on now.

We have sent a direct email to both our estate agents and seller asking for clarity from their solicitor on what the true picture is

At least then we can make an informed choice on how to proceed and if we hang on, but at least we know it's likely to be next year

And go on holiday! We have put everything on hold and we are currently an overworked couple holding on for the grant to come in any minute

And looking very unlikely that it will I'm really annoyed that I was led down the garden path

I don't think anyone will be able to give you a 'true picture' - they won't know themselves. The probate office are a law unto themselves. We are nearly 12 months in with 3 sales of MIL's flat having fallen through.

As soon as the gentleman passed away the house should have been removed from sale as the recipients of the property do not own it with the right to sell it until probate is granted.

You need a plan B which is either to pull out of the chain and really annoy your buyers. Or set an ultimatum to your vendors the they have to complete and rent as the probate is their problem, not yours.

good luck. And hard luck at having found the one thing guaranteed to make a stressful experience even worse.

Probate time depends on how complicated it is. My mum's didnt take too long but she had a will, easy finances, no tax to be paid and everything was left to me as her only daughter.

If they only died mid April it is very unlikely that this will be completed any time soon

My dad has been dealing with my uncles probate and it has taken almost 2 years, though this is an extreme case.

They shouldn’t really have put the house on the market until it was granted

Can you move into parents / rented to complete your sale?

Took almost 2 years for FIL's probate and still, 6 months later still waiting for some of it to pay out

If they died mid April, I doubt the probate would be applied for then, they would have been sorting the funeral and stuff, they wouldn't have had anything ready surely. DF had no property and no IT and it took 5 months for probate.

It sounds as though your estate agent is very poor. They have not managed the chain and provided clarity of information. The agent at the top should have taken the “probate” sale off the market. Due diligence should have taken place regarding everyone’s circumstances.

Estate agency and house purchase in England and Wales is very poor but it’s hardly surprising when people want pile it high low commissions. You get what you pay for. There is a world of difference between a good agent and a pedestrian one but you won’t get it for 1% or less. The same goes for conveyancing.

Your solicitor needs to write to your vendor’s solicitor who will write to their vendor’s solicitor.

Sell your house. Rent/temporarily move in with family. Buy as a first time buyer with no chain. Houses will get harder to sell. Shore up your position.

There is little to no chance probate will be granted swiftly.

This is accurate advice. I've heard of 6 months but it took me 3 months, just under, on behalf of someone else last year.

Sorry to derail from OPs question ...but do you mean people are expected to pay IHT upfront before they have received, through probate, the estate they are inheriting?!

Yes.

We are just about to go through this. There’s a chance we can use my mother’s savings to pay the IHT direct to HMRC but it is very complicated.

A neighbour told me my parents’ house would be worth more than a million and looked surprised I almost burst into tears because that and their savings would mean IHT is payable. I am happy to pay it but it is unfair to be liable for a tax on money you haven’t yet received.

My parents lived in a modest semi. The area became very popular. If I could beam myself back 25 years I would bet my father to take out a life insurance policy written in trust for my brother and me, which would fall outside the estate. We are doing this for our own children.

It all depends on how the estate is held. In many, many cases the executor will be a family member with power of attorney and/or jointly named on accounts. In such cases the money can be paid from the estate if there are liquid assets. DH is in this position. The estate had money in joint accounts fortunately.

In some more complex cases the executor might have to get a loan. This is why people don't want to be executors (and its a huge PITA and a lot of work).

Never be an executor to an estate where there will be IHT to pay unless you're also a beneficiary and there are liquid assets. Use a solicitor.

Yes , but there is a form you can use to send to the main institutions where they will pay it directly from the deceased account to the revenue. It’s only a problem I believe if the main asset is property or other things like art that needs to be sold to pay it. They do let you defer some of it I think, but charge interest and you still have to pay some. we were fortunate that there was enough to cover it in the bank accounts.

Correct. Although where there is property involved, HMRC will allow you to pay by instalments but you do still have to pay 10% of the IHT due upfront even in this situation.

https://www.gov.uk/paying-inheritance-tax/yearly-instalments

On page 12 of form IHT400 there is the question:

"110 Do you wish to pay the tax on the amounts shown in boxes 95, 97 plus 99 by instalments?"

If even paying 10% of the IHT from the estate is not possible then it used to be the case that the executors would need to get a loan to pay it off.

But earlier this year, HMRC announced that they will offer a "Grant of Credit" if the house has been put up for sale and an offer accepted (yes, they are saying that you must have accepted an offer even before the house goes through probate)

https://www.gov.uk/guidance/applying-for-a-grant-on-credit-for-inheritance-tax