- October 30, 2016
- Posted by: admin
- Category: Market Update, Tax Planning
Most of us worry about the rising cost of living without giving a thought to how big the bill for unraveling our financial affairs when we die is likely to be. Many of us asked to stand in as an executor for a friend or loved one when they die have no hesitation about stepping up to the plate without thinking about the hassle, time and money involved.
Former Prime Minister David Cameron promised to make inheritance tax cheaper, but this only applies to surviving spouses or close family members who gain property or other assets.
Sharks circling for fees
For instance, for millions of buy to let landlords, their property investments fall outside of the new inheritance tax rules. Although an estate may look valuable, the sharks are circling with lawyers, accountants, and valuers and other professionals all charging a pretty penny for what does not seem much work at all.
The big problem for executors is probate sets a specific deadline for paying inheritance tax and if the bill is not settled on time, interest starts making the bill swell. But executors do not always have the cash available by the due date and need to pay advisers for working out the value of the estate and how much tax needs paying.
Eye watering fees
For a reasonably average estate in today’s terms of approaching £1 million, professionals charge some astonishing fees. Expect to pay:
- Around £25,000 to £30,000 to a solicitor or an average rate of £200 – £250 plus VAT for an hour
- Valuers charge around £350 + VAT for a house inventory plus extra for drawing up a report. Figure to fork out around £1,000 even if the house contents are worth much less
- If you have overseas property, you will need solicitors at that end as well – if assets are in more than one foreign country, each will need a local lawyer
The little bills add up too – £40 for redirecting post for instance. Don’t forget your time, stamps, stationery, dealing with banks and financial firms, estate agents and phone bills.