probate forms and interview

[shoemonster]

my mother recently passed away. i had power of attorney and am chief beneficiary in her will.

probate tax form asks about gifts totalling more than £3,000 per year. My mum told me to take whatever money I needed, as she was leaving it to me anyway, but wanted to help me now rather than later. Going through her statements, the amounts came to between £2,800 and £5,000 per year in the last 7 years.

as I am self-employed, i am now worried about the implications of declaring this on form. mum also received attendance allowance, which she told me to take, which i believe is tax free. this was paid into her account and i didn't take it, but will i get into trouble for accepting the above amounts? or do i not have anything to worry about? or would i be entitled to the attendance allowance anyway? the amounts per year to my husband and myself would total less than £3,000 each.

i had previously phoned attendance allowance before she was getting it, and they said that it was being paid directly to me. as my mother requested. they then checked and found that it had not been, so said they could only backdate so much of it, and credited her account with over £6,500 - out of which I took £3,400.

I am feeling very stressed about the whole thing and and would appreciate any advice.

shoemonster

[dzug2]

You are not going to get into trouble from the income tax point of view - they were non taxable gifts whether you were really entitled to them or not. They could affect IHT - but unlikely in view of the amounts. And that's not 'trouble' anyaway - it's just paying what's due and the form is to allow that to be calculated. Just declare them where required.

The only possible source of trouble is another beneficiary who is receiving less because of the gifts.

[Buenchico]

As Dzug2 indicates, bona fide gifts (per se) aren't taxable and they can't 'get anyone into trouble'. The only reason that the form asks gifts of over £3000 in any one tax year (during the past 7 years) is that amounts in excess of that can be counted as part of the deceased person's estate when it comes to calculating Inheritance Tax. But if the total value of the estate comes to less than £325,000 there will be no Inheritance Tax to pay anyway.

If the estate does exceed the £325,000 Inheritance Tax threshold, then the whole of any amounts gifted by your mother, in excess of £3000 (to your or to anyone else) during the 3 years prior to your mother's death will count towards the value of the estate. For gifts (in excess of £3000) given between 3 & 4 years prior to your mother's death, 80% of their value is regarded as part of the estate. For gifts (over £3000) in the previous year, only 60% of their value counts towards the estate. For gifts (over £3000) in the two years prior to that, 40% and then 20% of their values respectively count towards the estate.

Probate interviews are very relaxed and informal affairs. Don't worry about yours.

Chris

[shoemonster]

thanx guys - i'm feeling a whole lot better after your advice - just hate forms, interviews etc - and don't know what happens at the interview.

shoemonster

[cathfromsaron]

ditto above advice and sorry about your loss.