Probate Solicitor Saves Client £117,500 Inheritance Tax on Estate


A Probate Case Study – Client Situation

Mrs R’s mother, Mrs C died whist she was living in a care home and her late husband, Mr C, died some years before. Mrs R instructed Simpson Millar to manage the Probate process for her.

We discovered a very complex situation with Mrs C’s Estate.

Before the introduction of the transferable Nil Rate Band in 2008, many Solicitors were writing Wills with Discretionary Trusts. When Mr C died, his Will included a Discretionary Trust. This stated that when he died, his maximum allowable tax free amount should be transferred into this Discretionary Trust. This would be available for his beneficiaries to use.

But as was often the case, most of the money was tied up in the property at the time Mr C died so it was unable to be transferred to the Discretionary Trust.

When making this type of Will, there is normally a debt lodged against the surviving partner’s Estate, so that the money due to the Discretionary Trust is paid when they die. Unfortunately, the Solicitor (not at Simpson Millar) who dealt with the Estate when Mr C died, did not make this clear.

Therefore, when Mrs C died and Mrs R instructed our Probate Solicitors to deal with her Estate, we discovered these issues.

How We Helped

Despite the lack of documentation, we satisfied HMRC that the debt should be paid into the Discretionary Trust.

The Outcome

Mrs R saved a 40% Inheritance Tax bill on nearly £300,000, totalling £117,500.

Mrs R was extremely happy with the result. She said, “I wanted to thank you for all you’ve done regarding my Mother’s Estate over the last year. Your professionalism, support and always cheerful voice at the end of the telephone has been hugely appreciated. I feel very fortunate to have had you dealing with all the Estate matters at such a sensitive time.”

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