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Submitting invoices during probate

  • 28-09-2013 9:17am
    #1
    femur61
    Registered Users, Registered Users 2 Posts: 1,588 ✭✭✭


    My fathers estate has gone to probate and I have inherited his house and money, the house needs work. My solicitor has told me that I can submit invoices for any work done on the house now (keeping inheritance tax down) and it will be taken out of his estate before his estate is given to me. I am the sole beneficiary.

    Question is whether does anyone know whether I would be able to invoice the estate after my fathers death as I need to do up the house and want to keep inheritance tax down.


Comments

  • #2
    brian_t
    Registered Users, Registered Users 2 Posts: 6,729 ✭✭✭brian_t


    femur61 wrote: »
    My fathers estate has gone to probate and I have inherited his house and money, the house needs work. My solicitor has told me that I can submit invoices for any work done on the house now (keeping inheritance tax down) and it will be taken out of his estate before his estate is given to me. I am the sole beneficiary.

    You haven't asked any question. :confused:


  • #3
    coylemj
    Registered Users, Registered Users 2 Posts: 25,492 ✭✭✭✭coylemj


    femur61 wrote: »
    My solicitor has told me that I can submit invoices for any work done on the house now (keeping inheritance tax down) and it will be taken out of his estate before his estate is given to me. I am the sole beneficiary.

    Not sure if the folk in the Revenue would agree, you can't inherit a house and then bill the estate for new carpets and curtains! If the house was in need of refurbishment, that should be reflected in a reduced valuation by your local estate agent which should help to keep the inheritance (Capital Acquisition) tax (CAT) down so it might not be in your interests to smarten the place up before the valuation is done.

    In a different scenario to yours: If the house was being inherited by several siblings and had to be sold in order that each beneficiary got their due then in many cases it would make sense to spend some money to put the place in good condition for a sale and in that situation, the executor would probably be allowed to use cash from the estate to refurbish the place if the spend was going to improve the sale price beyond what was spent on it but if you are the only beneficiary then you'd be expected to take the place as you find it.
    femur61 wrote: »
    Question is whether does anyone know whether I would be able to invoice the estate after my fathers death as I need to do up the house and want to keep inheritance tax down.

    You can bill an estate for legitimate debts which exist at the time of the testator's death but what you are describing does not fall into that category. What you are suggesting amounts to having your cake and eating it.


  • #4
    Boom__Boom
    Registered Users, Registered Users 2 Posts: 3,115 ✭✭✭Boom__Boom


    femur61 wrote: »
    My fathers estate has gone to probate and I have inherited his house and money, the house needs work. My solicitor has told me that I can submit invoices for any work done on the house now (keeping inheritance tax down) and it will be taken out of his estate before his estate is given to me. I am the sole beneficiary.

    Question is whether does anyone know whether I would be able to invoice the estate after my fathers death as I need to do up the house and want to keep inheritance tax down.

    There's no way that bills for any work whatsoever done on the house would be accepted as legitimate by the revenue.

    If that was the case you would have everyone who ever inherited a house adding on extensions, converting attics, doing the house up etc.

    I would imagine any works down to maintain the house in the condition it was in when the death occurred would be acceptable, but any done to improve it would not.

    Ring up the Revenue, explain your situation, tell them you want to do what's right and ask them what are you entitled to.

    Odds are they will advise you pretty decently if you approach them in this manner beforehand and even give some pointers on any area where there is some leeway.

    I could easily see the Revenue telling you to take a running jump when the time comes to pay the inheritance tax if they felt you were trying to pull a fast one and give you no leeway whatsoever on any of your costs.


  • #5
    Marcusm
    Registered Users, Registered Users 2 Posts: 10,441 ✭✭✭✭Marcusm


    I can't see how using the cash in the estate to undertake work on the house could reduce a CAT liability unless the money spent did not enhance the value of the property (in which case, why spend it?).


  • #6
    camphor
    Banned (with Prison Access) Posts: 202 ✭✭camphor


    Marcusm wrote: »
    I can't see how using the cash in the estate to undertake work on the house could reduce a CAT liability unless the money spent did not enhance the value of the property (in which case, why spend it?).

    There is a scheme where a person who has lived in a house inherits it to receive the house free from tax. Conditions apply. It could well be that by shifting money from the cash element into the house there may be a tax saving.


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  • #7
    femur61
    Registered Users, Registered Users 2 Posts: 1,588 ✭✭✭femur61


    Boom__Boom wrote: »
    There's no way that bills for any work whatsoever done on the house would be accepted as legitimate by the revenue.

    If that was the case you would have everyone who ever inherited a house adding on extensions, converting attics, doing the house up etc.

    I would imagine any works down to maintain the house in the condition it was in when the death occurred would be acceptable, but any done to improve it would not.

    Ring up the Revenue, explain your situation, tell them you want to do what's right and ask them what are you entitled to.

    Odds are they will advise you pretty decently if you approach them in this manner beforehand and even give some pointers on any area where there is some leeway.

    I could easily see the Revenue telling you to take a running jump when the time comes to pay the inheritance tax if they felt you were trying to pull a fast one and give you no leeway whatsoever on any of your costs.

    I would be paying inheritance tax on the money. I could do up the house to sell it quicker and get more money, I am aware I would e paying CAT then but wouldn't I be taxing tax twice ie inheritance tax and CAT.

    My main gripe with this if it was two years ago I wouldn't be paying any tax, my father already paid tax on the money. But because we as a country guaranteed the bondholders the government needs money for nothing to cover their overheads so they lowered the inheritance threshold. It really is money that tax has been paid on already in another transaction.


  • #8
    Losty Dublin
    Registered Users, Registered Users 2 Posts: 13,245 ✭✭✭✭Losty Dublin


    femur61 wrote: »
    I would be paying inheritance tax on the money. I could do up the house to sell it quicker and get more money, I am aware I would e paying CAT then but wouldn't I be taxing tax twice ie inheritance tax and CAT.

    Inheritance Tax is a form of Capital Acquisitions Tax on the estate. You will not be taxed twice upon inheritance, only one tax is levied here. There is a threshold of an estate or inheritance that is exempted from CAT; you will only pay CAT on the excess of this. These thresholds vary, depending on when your fathers death is while there are a few grounds where the CAT liability may not apply. Revenue are the best people to talk to in this regard.


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