Derbyshire Legal Talk: April 2009
PUBLISHED: 15:16 29 April 2010 | UPDATED: 10:09 15 May 2018
Legal talk with Flint Bishop LLP.
Question: My father died unexpectedly and I am trying to get the information together to take to the solicitors. What should I take and how quickly is this required because inheritance tax might be payable?
ANSWER: When someone dies unexpectedly, not only does the family have to come to terms with the loss of a loved one, they may also find that their paperwork may not be in order.
If you can it is best to find the information on your father's investments, and you'll need to take only the last statement. Original policy documents will be required, together with building society passbooks, share certificates and bank statements covering the last six months if they can be found, as the solicitor will wish to see them. Details of accounts closed many years ago should be kept, but are not required by the solicitor unless they are specifically asked for. There is no need to produce the last six years' utility bills - only the last bill is necessary.
The solicitor will also require an idea of the funeral costs and any other debts that are outstanding. If someone's affairs are in a mess it is not always easy to find the information and the searching can be quite time consuming. There is no need to be overly concerned about any delay because interest on any unpaid inheritance tax runs from six months after the date of death, with a current interest rate of 1 per cent and will continue to accrue until the tax is paid.
If your solicitor is able to apply for the Grant of Probate within six months of death, inheritance tax is due on all the assets apart from any house or business. The remainder of the tax can be paid in 10 annual instalments, but this may be subject to interest.
In the current economic climate with houses remaining on the market longer than desired, you may have no alternative but to pay the interest on unpaid tax if there is insufficient cash.
Each case is different and will depend upon the assets in the estate, and it is possible to use any money in a bank or building society to avoid the need to arrange a loan to pay the tax bill.