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Quiet times, can they last?

Quiet times can they last

Here at Probaters we have noticed that transactions have been dealt with at breakneck speed by both the Land Registry and our local Probate Registry. Early in December we took instructions for a probate and obtained the grant by the end of the month and had the property transferred to trustees in the first week of January! I fear that the state of the property market might mean that we see Land Registry staff with time on their hands for quick turnarounds. Unfortunately the state of the NHS and the flu epidemic does not augur quite so well for leisure at the Probate Registries.

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The Unfair Residential Allowance

the unfair residential allowance

This is good news for people owning a house or flat who have children. They get an extra £100,000 on their inheritance tax free allowance making a total of £425,000 and this is increasing each tax year to 2020 when it will be £500,000 making a total of £1 million for married couples and civil partners. But it clearly discriminates against those without children. The rules are also extremely complex, in particular, when they try to deal with someone who has sold his or her house and downsized. 

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Can you believe it. Man marries his accountant

Only joking but can it be long before a headline like this makes it into the tabloids. Many well-off people face large inheritance tax bills but do not have the resources or the know-how available to the Dukes of Westminster of this world. And therefore they face enormous inheritance tax bills. The one simple exemption for inheritance tax is where you leave everything to your spouse. We have heard anecdotes about elderly single men marrying cousins or close friends much younger than themselves knowing that the “spouse” will do what is expected when the time comes. Will HMRC challenge exemptions applied in these cases and if so on what grounds?

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What happens to the bank accounts?

Not so long ago banks would insist on probate or letters of administration being obtained before they released the funds of a deceased customer. Exceptions were made for paying funeral accounts and inheritance tax. If the amount in the account was small they would sometimes release money without waiting for probate. That has now changed and t he banks release substantial funds without probate. I understand that the relevant amounts are now £50,000 for Barclays and Lloyds, HSBC does not have any limit, NatWest and RBS is £25,000 and Nationwide is £30,000. This is often convenient and good news for bereaved families but we have come across a number of cases where banks have released money to persons not entitled under the deceased’s will or intestacy. The banks must have known this was going to be a possibility when they raised these limits and no doubt made a cost benefit analysis that the mistakes would cost them but not as much as the extra staffing needed to check probates and keep the accounts running in the meantime.

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Probate Fees and the Brexit Effect

I am assuming that the probate fees increase which had been on the cards before the last election will not now take effect. The Government is so hard-pressed in dealing with its numerous Brexit problems that anything else controversial is unlikely to see the light of day. We can probably take it for granted also that in probate - this unfashionable area for Government - there are unlikely to be any other major changes in the foreseeable future.

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