Probate issue

[Trevor51]

My father died some years ago and my mother died at the New Year but probate is not complete. Only one of my brothers has seen the will. It is possible then at least 2 of the siblings were left out of the will leaving 3 to inherit. What is known is that one brother who lived in the family home since his divorce but is now married to a woman who has her own home has the right to remain living in the house. If he gave up that right only then would the house be sold. How does this work with inheritance tax. I understand that there is a 10 year limit to clear the inheritance tax and that it must be paid in installments.
Since there is no requirement for the beneficiaries to pay the tax how will this work. My brother could continue to live there and outlive all of us. What happens? I am surprised that the solicitor who drew up the will didn't foresee this. I assume this is why probate is taking so long.
In the event that the house is sold in the future then I assume capital gains tax is applicable. Should the beneficiaries write this inheritance into their own wills? I assume that this may then get hit with double inheritance tax.

[2222]

With nil rate bands and residence relief, the inheritance tax may be less than you expect. Do you have a figure in mind? Any tax can of course be paid from other assets. Paying in instalments does not help much, as interest has to be added. The will may allow the executors to borrow against the house or to sell it and buy a cheaper one, thus freeing up capital to pay any tax due. This is all very much the executors' problem, and there's very little you can do or have to do about it.

It sounds like your brother has an immediate post-death life interest in the property, and it will be considered alongside his estate for IHT when he dies. So, yes, there could be two chunks of IHT payable on the property, once on mum's death and again on your brother's.

Capital Gains Tax should not be a problem if your brother retains his life interest in the property until he dies.

You obviously should not rely on the above and should get professional advice, based on a copy of the will. However, as a rough outline, based on the outline you provided, it may help.

"I am surprised that the solicitor who drew up the will didn't foresee this. " - There may have been little choice. If your brother was dependent on your mother, he may have had a claim for support, in any case. So, providing this in the will was a pragmatic way to go.

[Peridot]

Hi Trevor51,
Just to clarify as there seem to possibly be a number of issues here.
Your father died and his estate was dealt with under his Will?
Your mother has now died so the estate is being dealt with under the terms of her Will? Probate has not been granted as yet so you are unable to obtain a copy of the Will, if you haven't seen it. Have you asked for a copy from the executor?
Are there 5 siblings? You believe that only 3 have been named under the Will who are due to receive an inheritance, which would imply you know the content of the Will?

You appear to be saying that under your mother's Will one sibling was given a right to remain at the property? Have you seen the wording of the Will in respect of this right to live at the property? Often there will be provisions indicating the person can only remain in the property until a certain event occurs, such as marriage, they leave of their own choice or their death? Can you provide the wording of the Will her to hep clarify the actual provision if you have it?

Inheritance tax is due on the basis of the value of the estate at the date of death, irrelevant of someone remaining in the property. It can't be deferred save for where residential property is concerned the instalment option can be utilised. So the IHT remains the same but can be paid over a period of 10 years with interest accruing during that time. This may help you understand how it works:- https://www.gov.uk/inheritance-tax you will need to click through to the next page too concerning passing on a home and how the payments are paid in those circumstances. This is an option but not compulsory. If there are sufficient assets to pay the IHT without instalments being made this could save money but again this depends on the size of the estate and the wording of the Will and exactly how the property was left in the Will.

There is a requirement to pay IHT it is not put on hold because a home sale is on hold. Interest will also accrue on unpaid IHT and potentially fines can also be added if it is not dealt with in the correct manner. This link may assist:-https://www.gov.uk/paying-inheritance-tax If you inherit a house and the inheritance tax is not paid from the estate or the executor then the beneficiaries who are left the house would become responsible.

IHT is a separate issue to the capital gains tax query. If the property value increases from the date of death valuation then a gain will have happened and CGT may become payable on the 'disposal of the asset' sale of the house. If once probate is obtained the legal title of the property is transferred to the executor/trustees pending the son moving out then upon sale they are responsible for the payment of any CGT before distributing the proceeds to those entitled. If the property is transferred into the names of the beneficiaries under the Will then they are responsible for the CGT payment. There are some reliefs available including the annual allowance that is deducted from any capital gain before the tax is calculates. In addition, i

f for example the property was left outright to an individual who used it as their primary residence then there may be an exemption but if the property is held on trust for other beneficiaries this would not necessarily be the case.

As far as writing aspects of this into your own wills there is little point. Inheritance tax if payable, will be due on your estate value. If you had not received a share of a property that was due to you as it had not been sold then the value of your share at the date you died would be included in your estate values and used in any calculation of IHT. The capital gains tax if due on sale will be calculated at the point of sale and paid from the proceeds before any sum went to whoever it was due to at that point.

Sorry a large amount of information that may or may not help at this point. Without the exact wording of the Will it is difficult to point you in the right direction with any certainty but hopefully it has clarified some aspects for you.

[Trevor51]

As far as I am aware my father's estate went to my mother. My brother has seen the will as it was he who told me that he had to right to remain living there. He is married and his wife has a property. He has only remained living in the family home Mon-Fri as it is close to his work. His wife has been living there Mon to Fri as well. At the week end they go to her house. I am not sure that he could claim it was necessary to remain living there. I haven't seen the will as until recently I wasn't concerned enough. My attitude was if my mother wanted to leave it to the cat's home that was her choice but to be divisive and cause friction is another thing. It is only since my youngest brother and sister have become concerned that probate hasn't been done that they have started to ask questions.It is their belief from here say that myself and one other brother were written of of the will. My sister has asked for a copy of the will but the solicitor doesn't seem prepared to supply it.
I estimate that there is about £100,000 or more that will be subject to IHT, so £40,000. So who is liable for that and it has to be fully paid within 10 years. Borrowing against the eventual sale and accruing interest strikes me as bonkers. Three of us are already over 65 so money in 10 or 20 years is of no use and my brother doesn't really need the house anyway. My youngest brother believes that he will simply live there and then rent out his wife's house.
My brother and sister are of a mind to contest the will, subject to actually see what it says. My brother feels that I and the other brother should inherit. I don't believe that my sister will agree to that I will only want a three way split, but split now not some time in the future.
Seems like there is a double whammy here. We don't get the money now when we need it during retirement and it then becomes part of our estate that would then incur IHT.
"

There may have been little choice. If your brother was dependent on your mother, he may have had a claim for support," Up until he was married there my have been something in that but since remarrying he was not dependent on our mother.

[Peridot]

Hi again,

So there is a solicitor dealing with the estate then? Are they the executor or is your brother and he has instructed them to deal with matters?
Unfortunately there is little further we can say until the Will is published when probate is granted. Then you can obtain a copy for a small fee from the Probate Registry. You then have 6mths in which to bring a claim. Unfortunately although you are in a class of people who could bring a claim, unless you could show that you were a dependant whether through receiving financial assistance or maybe your children do you may struggle to bring a claim under the Inheritance

(Provision for Family and Dependants)

Act1975.
Do you know of any reason why your mother would not include 2 of you? If there is some doubt over her mental capacity or that she had been unduly influenced to take this step you may have recourse to contest the Will but this would be necessary to do before probate is granted.

I would suggest that you seek some face to face legal advice urgently to see whether you may have an options here and whether it might be necessary or worth placing a caveat on the Will to prevent a Grant being issued. Although to contest the Will there would need to be proof of some issue over its validity.

[Trevor51]

My mother's solicitor is the executor. The only thing that I can think as to why I was excluded was that I went through a messy divorce. Basically our mother hated all of our spouses. My wife was from an ethnic minority to boot. My mother quite openly spread rumours that I was not the father of my two children. Not that I had any doubt at all I did get a dna test done so if anybody repeated the allegation they would have received a swift response. As to why my other brother is excluded I have no idea. I do stress that this is on hearsay. My youngest brother was under the impression that a dispute had to be raised with in three months so having 6 months gives more time.
I agree that we need to see the will as it is pointless trying to second guess what is going on. It appears that the brother in the house and my youngest brother had a falling out at some stage and I am being used as a ago between. The youngest one is suggesting that there was some sort of pressure put on my mother but that could be mischief making. My mother had an incredible knack of playing one family member off against another then sitting back and watching the sparks fly. How much was truth and how much was pure fiction nobody ever know but she claimed to have been coerced into writing the will. Who knows.

[Peridot]

Hi Trevor51,
Oh dear, she sounds a one! I have a similar mother in law regularly trying to play her children off against each other. Can be very unpleasant.
The 6 mths from the grant is for an inheritance act claim. If the more likely scenario is that the Will itself is questionable then you would need to prevent the Grant being issued so would need to act on that sooner.
Maybe go halves with your brother and just get some initial advice. Contested wills and probate can be notoriously expensive and stressful so you really need to think whether you'd want to do anything at all, even if you found there was a possible opening there and could provide the evidence to back any potential claim.
Keep us posted and good luck.