Inheritance tax blow for widows and widowers

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gardenlaw
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Inheritance tax blow for widows and widowers

Post by gardenlaw » Sun Apr 27, 2008 10:53 am

In his Pre-Budget Report in 2007 the Chancellor, Alistair Darling, announced new IHT rules that allowed anyone dying after then to have the benefit of their late spouse or civil partners unused IHT Nil Rate Band. Effectively this could double the Nil Rate Band to a current figure of £624,000.

Good news for heirs? In many cases yes, but what if you cannot find the correct paperwork to back up the claim? This is particularly difficult for those whose spouses died perhaps decades ago, even in World War II. So what do you need? The taxman requires 10 different documents including Grant of Probate or Letters of Administration if no will: the Will itself and if there has been a Deed of Variation a copy of that.

Many people will not have these. If they used a solicitor at the time it is likely their files will have been destroyed. They only need to keep most documents for about 6 years and the Probate for 12years. Solicitors will keep them longer but for decades?

To see the Inland Revenues (HMRC) requirements (Form IHT 216) visit www.hmrc.gov.uk/cto/iht216.pdf

You can get a copy of the Probate with the will attached for England and Wales from www.hmcourts-service.gov.uk and of death certificates and marriage certificates, again for England and Wales, from www.gro.gov.uk

despair
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Post by despair » Sun Apr 27, 2008 6:07 pm

As usual though its deaths after Oct 2007

If it suits him he will backdate this and that

But for many people who lost a parent on 2nd death in 2006 and faced a hefty IHT bill that would have easily been mitigated by this new rule it hurts in the pocket

Its especially cruel when so many of those were actually never in the least bit wealthy just had a small bungalow that went over the miserly £285,000 limit

subjecttocontract
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Post by subjecttocontract » Sun Apr 27, 2008 9:16 pm

Its not unreasonable to be asked to provide supporting evidence of a claim. The Government can hardly be criticised for taking all necessary precautions to safegaurd misappropriation of taxpayers money.

If the person involved hasn't kept the necessary documents I was under the impression that most of them can be obtained with time, effort & a little cost.

I'd blame the Gov for lots of things....its almost a National hobby..... but blaming them for being carefull with taxpayers money is NOT something I'd put on the list! :roll:
Almost everything I say is tinged with irony !

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Post by gardenlaw » Mon Apr 28, 2008 9:11 am

I have just seen this real problem and possible solution

I've just had my first rejection of the transferable allowance on death of second spouse.



"Husband died years ago, before spouse exemption. Wife has now died. The estate is over £312,000 but under £624,000. Revenue now say that wife has only one allowance as husband did not have an "allowance " as such when he died, so no allowance can be transferred.



Surely this is grossly unfair? Is it not just adding insult to injury? In other words, tax could have been paid when husband died and will now be paid when wife dies, whereas if he had died not quite so prematurely, then no tax would have been payable at all.



I take the Revenue's point, but it is quite inequitable and unfair. I feel like arguing with them on this, does anyone think I may have any chance of success? Surely, there cannot be many such cases. Are they really going to lose much tax by backing down?



Any comments welcomed!"


"One of my colleagues was looking at this and found this guidance on the HMRC site



http://www.hmrc.gov.uk/cto/customerguide/page15.htm



It looks like even from 1914, the Revenue consider there to have been a nil rate band. Maybe you want to check again with them ?"

Further details

"Unless, perhaps, the first death was as a result of death on active service or otherwise as a result of injuries sustained on active service or by act of war, when the gift to the surviving spouse should be exempt from Estate Duty, even if more than the nil rate band available at the time. I have to demonstrate this for a 101 year old client whose husband died more than seventy years ago in an flying accident on (or more accurately just off) an aircraft carrier of the Royal Navy, and if I can get HMRC to agree (when the time comes and my aged client passes on) that his death was "on active service", the modest sum (but still over the £100 nil rate band at the time) left to my client by her husband should be exempt from Estate Duty, so his nil rate band was not used at all and her estate can claim the second nil rate band.

I imagine that though there may be few people now living who have had so long a widowhood as my client, the numbers of pre-CTT war widows (when you include post WW II actions such as Korea, Malaya, Kenya, Aden, Cyprus, etc.) will not be insignificant and there may be a number of cases where proving an Estate Duty exemption for death on service may greatly assist the heirs on the second death."

Gardenlaw

despair
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Post by despair » Mon Apr 28, 2008 6:00 pm

Oh I would indeed argue the case with HMRC

I am sick to the teeth of their money grubbing little hands

As for GB he is the worst kind of thief

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Post by stringrae » Tue Apr 29, 2008 2:24 pm

Aw despair how could you say that about our Gordon? :shock:

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Post by subjecttocontract » Tue Apr 29, 2008 3:01 pm

I've never been so well off......mind you.....unlike Despair, I don't know how much of that is down to the Labour Party.

I do know that it certainly is NOT down to the Conservatives or LibDems.

Petrol at £1.50 per litre is fantastic news......keeps all the poorer people off the roads and means less congestion for those of us that can afford the prices. Did you know that in Saudi Arabia petrol is 8p a litre and 2p a litre for diesel......makes the middle east start to look attractive.
Almost everything I say is tinged with irony !

despair
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Post by despair » Tue Apr 29, 2008 9:07 pm

Stingrae

You would shudder to hear the expletives i utter about Gordon and his bunch of cohorts

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Post by Mandy » Wed Apr 30, 2008 11:25 pm

This has always been the problem with this Labour government. An overwhelming amount of legislation has been passed and the result on several ocassions has been that they have disadvantaged a section of people they were actually trying to help and then over-complicating the legislation to compensate so that everyone's confused and requiring enormous amounts of information from years ago when you didn't have a need to collect it.
The intention of the legislation is good - the practice has a few situations where it disadvantages its intended targets.
That doesn't mean previous governments or other current opposition parties were/are any better overall though.

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