Probate Tax

Lukeydip

Hi,



My wife's grandmother died in 1988 and for some reason propbate was never taken out on her home.



The house was left to her only son who lived there all his life anyway.



He is now trying to get the house transferred into his name but is being told he has to pay upto 80k probate tax.



Anyone know if this is correct



Dec

Maximilian

My recollection of the tax is a little hazy. Probate Tax was abolished in the budget of 2001 but only in respect of deaths occuring on or after December 2001, so would still apply in respect of a death in 1988.

The rate was 2% of of the taxable value of the estate above the threshhold (which was about £40,000 in 2000 I think). I forget how you arrived at the taxable value - certain things were deductable such as funeral expenses.

If you didn't pay on time (you had 9 months) interest was charged at a rate of 1% (of the tax due) per month, capped at the amount of the original tax itself.

So to give a broad example, if your grannie dies in 1988 leaving a taxable estate of £2million. Probate tax would have been £40,000. As it was never paid, interest accrued at €400 per month, capped at £40,000 after 100 months. Total: £80,000

The Revenue aren't totally unreasonable, it would worth trying to negotiate something with them, especially if there is some good reason why itwas never paid. It can sometimes yield results.

ircoha

Approach the revenue asap as the property will need tax clearance before it can be transferred, you dont mention a value but he could be liable for Inheritance tax also. As staed else where the Revenue are not unreasonable if dealt with openly