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Historical IHT return of estate error

My father declared assets for IHT at the passing of my mother when they were exempt by survivorship

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Dear forum users, what a fantastic forum this is, I have spent many an hour gleaning opinion and advice here.

Here is the problem, my mother (married to my father) passed away in 2008. In her will she left everything to my father. 

My father has now passed away and I am completing his IHT400 etc. 

I have noticed that in 2008 my father had ?erroneously completed the return of estate form for my mother's estate at question 13:

"Deceased's own assets (including jointly owned assets NOT passing by survivorship), cash, household goods, stocks etc)

My father, despite inheriting everything through survivorship duly wrote down their her savings and household assets to the tune of £158,000. As he inherited all of this, he was the survivor so should have written a 0 in all these boxes as all cash, shares and household goods should have passed to him without IHT liability?

He duly went to the probate interview and the net value of the estate on the probate document was recorded as £156,000 (which was stapled to the will stating that all the assets were to my father).

My question relates to the fact that there was clearly an error made here as my mother's nil rate band should not have been used at all (it was to the tune of £158k) and this is going to cost us big as we will not be able to claim what is rightfully hers as a result of the error on the form or at the interview. 

Is there any hope of writing to the HMRC to have this overturned/reviewed after this length of time (9 years) or do I need to accept this as a lost cause. 

What I don't understand is that question 17 discusses exemptions and Dad correctly subtracts the estate that is IHT free under survivorship and this leaves the "net qualifying value for excepted estates G-H" as £9000 (the amount of NRB that should have been used since Mum had given some non-exempt gifts some years earlier) but this figure is not used in the summary box at the end:

A) gross estate 158k

D) debts 2500k (funeral expenses)

K) (A-D) net estate in UK 156402

No account is taken of H and J in the exemptions. 

Anyway, Mum should only have used £9000 of her NRB and on her probate documentation it says "it is hereby certified that it appears from information supplied on the application for this grant that the gross value of the estate in the United Kingdom amounts to £158k and the net value of such estate amounts to £156k), does this mean mum has used 156k of her NRB?

 

Thanks in advance for your help! 

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By catlady
29th Sep 2017 09:44

At first glance it appears that you may be getting confused about the meaning of survivorship.

Joint assets usually pass by survivorship to the other owner on death. This is merely passing on the ownership, the value of the deceased's share is still considered part of the estate for IHT and Probate purposes.

Then you have the spousal exemption, which allows any assets passed to your father to escape IHT and not effect the nil rate band. The statement about the value of the estate on the grant is correct - the NRB and IHT situation is irrelevant to anyone needing to see the grant.

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By Taxesdeathmoretaxes
29th Sep 2017 17:17

Thanks v much ... I think you are right. The amount in the grant of probate does not bear any relationship to the NRB.

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