Client Case Study

Probate and Outstanding Tax Issues

The scenario

Finch Tax were referred this client by a local Will Writer who asked if we could carry out the probate and estate administration for the family’s recently deceased mother. The Will Writer had visited the family to prepare Wills for them but identified there were some tax issues that needed dealing with as well as an estate that needed administering. The tax issues were in relation to some jointly owned land that the recently deceased and her husband (who had died before her) had gifted their children a few years before but had recently been sold.

 

Unfortunately, the land was not valued at the time of the gift nor had tax advice been taken before the gift took place. The family were not aware that a gift (where no money changed hands) was a disposal for capital gains tax and tax may be due.

 

The land in question had since been sold by the children at a significant profit and therefore they were uncertain of their tax position and that of their parents. They therefore did not know how to proceed with dealing with the probate the estate of their deceased mother or disclose the issue with HM Revenue and Customs. This brought the family a lot of stress and worry.    

 

How we helped


We met with the family at their home and listened to their situation to understand what was required to be dealt with. We explained the tax implications of the gift of land and what approach needed to be taken with the disclosure to HM Revenue and Customs. The family immediately felt reassured and had absolute clarity on what needed to be done.

They agreed it made sense for Finch Tax to tackle the tax disclosure and deal with the probate and estate administration for the mother at the same time. This was to ensure a smooth and consistent approach across the taxes and the probate application.

A disclosure was made to HM Revenue and Customs and tax returns were filed on behalf of the deceased parents. HM Revenue and Customs waived all penalties and surcharges in respect of the late notification of the charge to tax and late payments.

 

The tax disclosure and probate process took under nine months to complete and the family can now move forwards with their own affairs with certainty. We then went back to the referring Will Writer to let him know the family were ready to discuss their Wills again.

 

Contact us


If you would like advice on the tax issues arising out of a loved one’s estate or need help with implementing the probate and estate administration process, we would be happy to help. Further details about our Probate and Estate Administration service can be found here. Please contact us for an initial free consultation on 0116 2167681 or email us at hello@finchtax.com.