Complex probate case saving £100k Inheritance Tax

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Will Power often faces a complex probate case requiring careful and expert resolution. The case of the estate of Mrs P is one of the more “interesting” and challenging instructions we’ve handled.

The challenges

The biggest challenge was to provide evidence of the marriage and death of Mrs P’s husband, as a successful claim of the Transferable Nil Rate Band (TNRB) could save more than £100,000 in Inheritance Tax.

(The Transferable Nil Rate Band allows transferring any unused percentage of the inheritance tax threshold from a deceased spouse to the surviving spouse).

An alternative was to claim Mrs P’s Residence Nil Rate Band, which would have saved £70,000 in Inheritance Tax.

(The Residence nil rate band (RNRB) is an extra amount of inheritance that can pass on death without any inheritance tax being payable.)

The probate case circumstances

The circumstances of this complex probate case are that Mrs P’s husband died in the 1970s during the war to overthrow Idi Amin; however, no marriage or death certificates were available.

There was a copy of a letter stating Mrs P’s husband died in Mozambique in 1979, handwritten by Mrs P on 28th March 2003.

There was also an affidavit, a copy of a declaration that Mrs P was married on 16th October 1960, signed by Mrs P and witnessed by a  Commissioner for Oaths. The shorter name on the declaration was that of Mrs P’s deceased husband, with a slightly different spelling.

If it could be evidenced that Mrs P was married to Mr P, then no Inheritance Tax would be payable because of the TNRB rules.

If this was not established and there was Inheritance Tax to pay, only the standard Nil Rate Band plus the additional RNRB allowance could be claimed.

Mrs P had made a standard will in 2015 which contained a crossing out of a beneficiary. Will Power was advised that this is not automatically contentious according to S21 Wills Act 1837 and case law of White 1991, and an affidavit may be required from the Will witness(es). The result is that the gift remains and should be held by trustees for distribution to the beneficiary.

Probate resolved

After much work and evidence collection, Will Power successfully claimed the TNRB, which saved more than £100,000 in Inheritance Tax for Mrs P’s beneficiaries.

If you have a complex probate case that you would like to discuss, contact us at enquiries@willpowergroup.com or call 0208 568 9602.