With the Probate Registry tackling a backlog of applications, probate property sales are suffering as a result of delays. In addition families are experiencing issues with payment of Inheritance Tax (IHT).
Applications are taking anywhere between 16 and 26 weeks to be processed, and a grant issued.
When talking with clients, it’s really impossible to give them a steadfast timescale. It depends on whether the application is stopped by the registry, and on method of submission (paper vs digital).
Selling a property in probate
Where the deceased was the sole owner of a property that you have inherited, as a beneficiary, and you do not wish to have it in your name, you will need a grant of probate in order to sell it on.
The Grant of Probate gives you the legal authority to handle the deceased’s estate. If you are dealing with a probate property, neither exchange nor completion can take place before authority is granted.
Long delays are causing headaches for bereaved families, at an already stressful time. Chains are at risk of collapse and individuals are waiting longer to receive their inheritance.
With the economy as it is, and the property market in a volatile state, delays are far from ideal.
There is evidence of a slight decline in property prices since the start of 2023, which means bereaved individuals stand to inherit less in certain instances.
Where there is an overall loss to the estate, you may reclaim any IHT paid to HMRC based on the higher values. Effectively, HMRC are subsidising 40% of the loss.
Claims relating to property assets are allowed where the property is sold within four years of the date of death.
Losses on shares under probate
You must submit any claim for an IHT refund on losses relating to the sale of shares within 12 months of the date of death. This is a much smaller window of opportunity, than with property assets.
With some paper applications taking in excess of six months, it’s clear that this is a problem and the Association of Taxation Technicians (ATT) have raised their concerns with Government.
It has been suggested that the 12-month window be extended, but the Chancellor has made no concessions.
Interest on Inheritance Tax (IHT)
Before a grant of probate can be applied for, the Probate Registry wants to know that the IHT has been paid to HMRC. Where funds are tied up in assets, this can prove challenging.
In certain instances, IHT can be paid in instalments. However, instalments attract interest and so too does any balance outstanding after six months. Ultimately, this adds to your existing IHT bill.
Probate and estate administration support
Whether you have concerns about paying Inheritance Tax following a bereavement, or you need a trusted professional to steer you through process of applying for probate, we can help.
GH Probate Ltd. provide probate services in Cambridgeshire, Bedfordshire and Hertfordshire.
From application, through to distribution of the estate, we can take on as much or as little of the role of executor as you wish. We will ensure that opportunities for tax planning are not overlooked.
To arrange a confidential discussion about your requirements, email probate@georgehay.co.uk or call 01480 426500.
Authored by Director of GH Probate Ltd., Barry Jefferd.
Our Probate service is provided through GH Probate Limited. GH Probate is the trading style of GH Probate Limited. Registered in England and Wales number 9630102. Registered Office: St George’s House, George Street, Huntingdon, Cambridgeshire PE29 3GH.
Authorised to carry out the reserved legal activity of non-contentious probate in England and Wales by the Institute of Chartered Accountants in England & Wales.
