Delays in receiving inheritance are making inheritance tax almost impossible to pay, leaving grieving families in limbo, says Agromenes.
For nearly 130 years, Country Life has been the focal point of those who want to buy or sell distinguished houses. Sadly, it is often death that brings a house to the market and, sometimes, it is inheritance that enables a buyer to move. In both circumstances, getting probate is crucial and this has never been as protracted or as frustrating as it is today.
Of course, there have always been estates that present special difficulties — contested wills, complex settlements and uncertain codicils—but what needs to be highlighted today is the frustration of almost everyone seeking probate, however simple the issues involved. This ought to be a streamlined and competent affair that takes no more than three weeks. Now, the simplest of cases can often take nine months.
The Probate Office doesn’t seem to care. Its attitude is summed up by its public notice that it will only accept telephone calls between 9am and 1pm. You can’t call anyone after lunch? What kind of public service is this? Is there any private business that could operate successfully if it told customers that they wouldn’t answer the phone during half the working day? They would soon find their customers would go elsewhere, but the bereaved can’t go elsewhere.
By law, a family and their executors must fill in the requisite forms and send the original will to the Probate Office. If they’re lucky, in about a fortnight, they’ll get an acknowledgement of receipt with a warning that the process will take at least 16 weeks and during that time the office will not be available for discussion, although it maintains its right to demand further information.
In the meantime, His Majesty’s Revenue and Customs (HMRC), of which the Probate Office is part, reminds executors that, within six months of a death, they must estimate the tax liability of the deceased and send a remittance to the HMRC. Failure to meet the deadline will result in interest being charged on the amount owed.
‘Executors must find the money to pay the tax, yet they can’t touch the inheritance on which the tax is levied’
Given that the minimum time to complete probate is bound to be at least four months, executors must find the money to pay the tax, yet they can’t touch the inheritance on which the tax is levied. The snail’s pace of probate means that many families are forced to pay interest. Even if other money is available, interest on it has to be foregone and tax must be paid on money the beneficiaries haven’t yet received and whose quantum can only be estimated. Why can’t this unreasonable demand be replaced by a requirement to pay the tax within six months of probate being granted? That would give HMRC an inducement to grant probate speedily.
Sometimes, quite reasonably, the Probate Office may want further information. What is less reasonable is that executors are often left in the dark, not knowing whether their reply to a question has been received, whether that answer is satisfactory or if further information will be needed. The office’s unhelpful website is supposed to allow one to follow the progress of a submission, but, in fact, it usually provides holding replies without a timetable. Frankly, DHL does it better, but that is probably because delivery businesses have to compete for customers.
We are warned that Rachel Reeves, Chancellor of the Exchequer, will make changes in inheritance tax in her September Budget. Before she does anything else, she should shake up the Probate Office and make it produce user-friendly forms to ensure that the initial information executors provide is as accurate as possible. Staff should be available during all reasonable office hours to reply to queries and to answer emails. There should be a tracking system that replicates the best in the private sector and tax should not be payable until six months after probate is issued.
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