Q. We have had a never ending communication with the tax office for nearly three years, trying to obtain child tax credits. Yet we have still not found out whether we have the right to the tax credits from October 2010. We have three children, but in a letter in April the tax office again stated that my husband and I have no children! How can they get things so wrong for so long? GI, Lincoln.
A. We understand there were delays in obtaining information from the tax office of another country, where you or your husband may have worked in the past. A spokeswoman for HMRC said: “HMRC have asked [the reader] for employment information to establish eligibility. Once we have received that information, we will contact the customer with the decision.” It has clearly now obtained the necessary information and decided that you are eligible for tax credits as a few days later you received two payments, one of £1,131.26 and another of £266.02.
Q. My mother died two years ago leaving an estate, but no will. I have one sibling, who lives and works at a house on her property in Wiltshire, which is valued at about £300,000. Since my mother died, my brother has been repaying an interest only mortgage on the property, which I offered to pay off, but which my brother refused to accept. There are two small patches of land apart from the house, which have been registered in my brother’s sole name at the Land Registry in Weymouth. As far as I know, the house has not been re-registered. My brother has been to Probate, but I think he did not mention my name and I have had no communication with the Probate Office. My brother is 60 years old and he was not dependent on mother. How can I get a share of the estate without upsetting my brother and not force him to sell the house he is living in? Do I pay any tax if he agrees to give me cash? VW, by email.
A. Gary Rycroft, a partner in Joseph A. Jones & Co Solicitors of Lancaster, says: “If a person dies without leaving a valid will, set rules of law known as the Intestacy Rules dictate who is entitled to administer the estate and who is entitled to benefit from an estate. In broad terms, the entitlement in both cases will be to the surviving spouse and then to the closest blood relations according to the degree of the relationship. In this case we assume there was no surviving spouse and that the closest relatives are the two surviving sons, in which case the brothers are equally entitled to administer the estate and to benefit from it. If there were other children of the deceased who died before her leaving children of their own, the estate would have to split between each branch of the family and the situation would be more complicated.
“So in this case the two brothers are each entitled to administer the estate and be appointed as the ‘Personal Representative’ of the deceased by taking out a ‘Grant of Representation’ at the Probate Registry. Also in this case each of them is entitled to share the estate. Where there is no valid will (an Intestacy) the Grant of Representation is known as a Grant of Letters of Administration. In this case we can assume that as the brother has ‘been to Probate’ he has taken out a Grant. This puts the brother in the driving seat with regard to administering the Estate, but as always with power comes responsibility, so the brother is under a legal duty to use the Grant of Representation to administer the Estate and in this case divide the Estate equally between the two beneficiaries.
“When someone dies the assets of the deceased do not always need to be sold. The beneficiaries concerned can agree to apportion assets between them, so in this case if one brother wants the house and buildings and the other wants the cash, so be it. If there is not enough cash to balance with the house and buildings, the house and buildings could be transferred into the joint names of the brothers and registered as such at the Land Registry. Joint owners of property are entitled to call for a sale of joint property at any time and if the other joint owners do not agree a Court Order for Sale may be obtained.
“Inheritance tax is sometimes payable when a person dies. At present the basic position is that each person has an allowance of £325k and it has been that amount since 6th April 2009. So in this case if the total value of the
estate at the date of death was less than £325k there would be no tax to pay, unless the deceased had made significant gifts during her lifetime which were still deemed to be part of her estate. If the value of the estate in this case was more than £325k then there still may be no Inheritance Tax to pay if the deceased was entitled to claim all or part of an Inheritance Tax Allowance from a spouse who died before her.
“If the brother dealing with the estate has ‘been to Probate’ the Inheritance Tax position should be known by him as he would have to complete the required Inheritance Tax Account before obtaining the Grant of Representation.
“The two brothers need to speak and decide how they are going to divide up the estate between them. If they cannot agree or the brother dealing with the estate will not co-operate, Victor should appoint a solicitor to represent him. If that does not break the impasse then ultimately, there is a procedure for removing the Personal Representative, but it is not straight forward.
“This case shows how important it is to have an up-to-date valid will and to appoint executors to administer the estate who you know will be trustworthy, fair and efficient.”