Does the court have to give its blessing?

I am dealing with an estate which was liable to inheritance tax. Following the application for probate I was informed by HMCTS that a caveat preventing the issue of the grant of probate had been entered by the deceased’s brother, who is not a beneficiary. This I have now learned, was because about 20 years or so ago, the parents had transferred their home to the deceased but continued to live there. There was no restriction on title. The reason why the parents did this was because of their concern that creditors of theirs might force a sale of the property in order to have their claims settled. In the event that did not happen. Both parents died intestate and following the death of the survivor, the deceased sold the property and kept the proceeds. It has now been accepted by the beneficiary of the deceased’s estate that the brother is entitled to a half share of the net proceeds on the basis that the deceased was holding the property upon trust for the parents and following the death of the surviving parent, was holding the property on trust for himself and his brother, who were the only persons entitled to the estate. This situation was not known when the IHT 400 was completed for the deceased’s estate and my question is, will HMRC want to see a court order confirming that the half share of the proceeds must be paid out of the deceased’s estate in order for it to allow this to be deducted from the value of the estate, thus resulting in a refund of a sizeable amount of IHT. If that is necessary, I presume that a joint application would need to be made to the court by the beneficiary and the deceased brother. I would welcome the views of others.

Patrick Moroney

Hi Patrick,

My view is that the most sensible approach is to submit a corrective account with a covering letter saying that you mistakenly thought the deceased owned the whole property, but you have now determined that he is only the owner of 50% of the property. HMRC will then tell you if they need further evidence of that fact.

Yours the Legal Beagle