Selling as is or investing time?

[HangTime]

Depends on the size of the estate as to inheritance tax, e.g. if she was a widow then probably £650k,.
Bear in mind if the other people in the will are direct descendents then their share of the property may be exempt up to whatever the proportion of £350k it is which could explain why they aren't fussed about valuation.

The approach we took when my father-in-law died was just to clear the property, clean and do some painting. No new carpets etc.

 

[Psycho Sonny]

Depends on the size of the estate as to inheritance tax, e.g. if she was a widow then probably £650k,.
Bear in mind if the other people in the will are direct descendents then their share of the property may be exempt up to whatever the proportion of £350k it is which could explain why they aren't fussed about valuation.

The approach we took when my father-in-law died was just to clear the property, clean and do some painting. No new carpets etc.

Were your carpets badly soiled / stained and smell though?

In this situation it's best to get it down to basics. Clean. New paint. New carpet. New boiler.

I would strip kitchen down to bare and leave as is. People can be funny about kitchens if they don't like the colour of the one you install, etc.

So if you leave it bare you can advise that they can get someone in to fit the kitchen for the day after completion and they can spec it exactly to their tastes and this is why we are knocking £5k off the price.

Thats as far as I would go forget buying new furniture or anything else. Boiler will need replaced. Would put a lot of people off if it isn't

 

[horseunderwater]

https://www.which.co.uk/news/2018/04/inheritance-tax-changes-in-april-2018-what-you-need-to-know/

 

[PatZ1989]

Thanks for the continued discussion on this guys, all very helpful.

its a 5 hour drive down to where it is (Devon from Essex), as for the point about value I put it somewhere between maybe 100 to 200 but I'm really not sure, this is just on the coast in Devon (Bideford), taking all the feedback I feel since we're in no huge rush its probably best to get it to a point where a young couple could buy it for 10k less with the caveat that they need to put in the kitchen i.e. we'll just strip it down to bare cupboards / shelves.

I'm not 100% sure about the inheritance tax, she left behind quite a large sum of money and the value of the flat if in cash would definitely put it over the 325 limit but can you not inherit property plus money and not pay the tax? like what if you leave someone 324k + a flat, must they still pay tax due to the value of the flat?

 

[PatZ1989]

Sorry just some more information if there are any tax wise gurus in here, the person who has died has left everything to her sister (who is a widow now) which is how I'm arriving at the 325k limit on inheritance tax.

 

[Psycho Sonny]

Sorry just some more information if there are any tax wise gurus in here, the person who has died has left everything to her sister (who is a widow now) which is how I'm arriving at the 325k limit on inheritance tax.

The person that died. Did they inherit any of their estate from a husband?

I think the £650K limit only applies to children of the deceased though but you can easily google this information and use the official .gov or HMRC website to see if it also applies to siblings or next of kin, etc.

There are 2 limits basically the £325K limit of the husband could be used on top of her £325K limit in some cases. Making it a £650K limit.

However there are limits with property etc too depending on who it goes to, usually applies to a married couple though.

It's best you just read through the official .gov or HMRC pages to do with inheritance tax tbh. All the info is there and it's not a long read.

As for the flat. I would strip it completely bare. Leave the kitchen bare walls. New paint, new carpet, new boilers.

Pick a neutral carpet (light grey or light cream) and neutral paint for walls again. White, light grey or light cream.

 

[doggles]

325k is the individual iht nil rate band, any gifts made in 7 years or in some cases gifts to trust made up to 14 years ago can affect the amount.

Mr A dies leaves everything to his wife then on her death the estate is distributed to beneficiaries. She would I her it his full iht nil rate band

Mr A dies, leaves 25k to his mate & rest to wife. The wife dies estate distributed she would inherit 25k less iht nil rate band as it's already been used. Although it's actually a % that's inherited to account for times before the limit was 325k.

I.e. if the limit was 200k at Mr A's death, 100k left to his mate and 100k left to his wife then 50% of the iht band is used. Mrs dies today then she would have her own 325k ( ignoring any potential gifts made prior to death ) she would then inherit 50% of 325k.

From last tax year something called the main residence nil rate band was introduced. The main residence has to be passed to direct defendants (kids,parents step kids etc) this works in the same way as the 325k allowance (ignoring the gift part, I.e. it's inheritable)

In the current tax year it's 125k, it's going up by 25k per tax year until it's 175k then the combined allowances would be 1million subject to previous gifts etc.

If the estate exceeds 2million then it reduces by £1 for every £2 it's over-the-top. Works in the same way as it does when you lose your personal income tax allowance if your incomes over 100k

Hope this makes sense

 

[doggles]

Sorry just some more information if there are any tax wise gurus in here, the person who has died has left everything to her sister (who is a widow now) which is how I'm arriving at the 325k limit on inheritance tax.

In this instance depends if the deceased had a husband which predeceased her.

 

[PatZ1989]

I don't believe she did, to be honest we're all at a loss at how she accumulated so much wealth, it's even more concerning that she had all this money and lived in such a dump.

 

[Psycho Sonny]

I don't believe she did, to be honest we're all at a loss at how she accumulated so much wealth, it's even more concerning that she had all this money and lived in such a dump.

was it in cash? this other wealth?

or in the form of bonds? commodities? shares?

maybe a friend gave it to her in their will?

 

[doggles]

I don't believe she did, to be honest we're all at a loss at how she accumulated so much wealth, it's even more concerning that she had all this money and lived in such a dump.

You'll be surprised how often it happens - i guess people loose the will to bother, if they have investments they'll just keep on growing, if they have an income which isnt being spent it'll keep building up - If the person has no close family to look after them and there's no involvement of social services then they kind of just slip though the gap

 

[PatZ1989]

it is quite a large amount of cash, no stocks, there are premium bonds but we're not sure how much we could only find little stubs.

 

[doggles]

Premium bond max is 50k now. It was 30k.

 

[Quartz]

First off, your wife needs independent professional legal advice NOW. You do not mess with HMRC. When my aunt died, the probate value of the house was the value of the property at her death.

Second, give serious thought to renting out the house via an agent. Again, you will need to take advice, but you may be able to offset the costs of renovations against the rent.

Third, you said your aunt was a hoarder; do not blindly chuck stuff out. My aunt was a hoarder and going through her effects I found all sorts of stuff that was important - legal documents, bank statements, and the like - all in the unlikeliest of places. I also found a large quantity of medical heroin - her mother (my grandmother) was a doctor and surgeon in WW1 - which initiated a call to the police. And I also found a drawer full of 40+ year old fireworks; that initiated a call to the Bomb Squad.

 

[PatZ1989]

It's my wife's father who is handling things, everything is going through a solicitor don't worry.

We are currently going through everything which is why we haven't had an estate agent or anything in yet - so far what we've mostly found is a lot of knives on the floor (I don't even know) and cat medication for a cat who died 20 years ago

 

[Quartz]

It's my wife's father who is handling things, everything is going through a solicitor don't worry.

Money is involved. You should keep an eye on things.

If your wife is their only child then you might want to look at varying the will so the property passes directly to her so as to not pay two lots of inheritance tax.