Any UK Legal Eagles around?

20 posts in this topic

Posted

Hi everybody,

I've had a letter from a GB solicitor about an inheritance from a relative. No word about how much though. What they are asking for is for proof of identity, that's fine, BUT they say they are going to check my creditworthiness. That sounds creepy to me. Is this normal practice for relatives not in the UK? Could it be that there are liabilities that need to be covered and I'm being checked for that reason? Am I being too wary? Is anyone here clued up on legal practice in the UK? That's a huge bunch of questions.

Advance thanks to anyone with an answer.

Cheers for now.

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Posted

You cannot inherit a debt (unless you are a co-signatory of the debt).

 

Any debts the deceased had will be settled out of the estate. If there are more debts than the total value of the estate then some creditors will (probably) take a haircut - see caveat about co-signees above. In this case you will receive no inheritance, since there will be no estate left.

 

PS: A possible exception to the above case may occur if you habitually pay bills from your account on behalf of the deceased. Creditors could then pursue you through the courts on the basis that you acted as if you were responsible for the debt (bills). They may also make an effort to claw back any 'gifts' which were given before they died that were given within a certain timeframe (I am not sure of this but have 7 years in my head, you would need to check) as this may be seen as a means of avoiding paying the debt. This could be seen as a type of debt inheritance but isn't really. It just means you don't get part of or any of the estate.

 

I expect you are pretty safe to give them your details but I have no idea why they are asking about your credit worthiness. They should need your bank details to transfer any inheritance to you.

 

Why don't you just phone the solicitor and ask them why they need to know about your credit worthiness?

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Posted

Thank you, Mr. Nosey. I certainly will be in touch with the solicitor to find out what my credit worthiness has to do with him. I just wanted to know beforehand if this is normal practice. Obviously not. It seems I'm dealing with a nosey solicitor. Well, I'll soon put a stop to that!

Thanks again for the information. Let me say that I'm really glad that you're nosey enough to be informative on the subject.

Cheers

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Posted

BEWARE had a similar email and i found out it was a scam,might not be in your case but just be careful.

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Posted

You can find out if it is a real solicitor's firm at this website: http://www.lawsociety.org.uk/find-a-solicitor/

 

You can call the number given on the law society website rather than the one on the letter in case someone is impersonating a real law firm.

 

Asking for ID is completely standard if there is an estate and no executor - say if there was no will - because someone has to be the law firm's client. You'd also ask for ID before paying out to a beneficiary if they are at a different address to that in the will. I don't know why a credit check would be required. But it is some time since I worked in that field.

 

There are of course situations where you have to pay a law firm fees if you are the main beneficiary under a will - for example if there is property in the estate or stocks and shares which you don't want to sell, but no cash. Likewise if you want to hold onto an expensive house but there isn't enough cash to meet the inheritance tax. But I don't think it would be standard practice even then to have a credit check.

 

Is it possible that it is not a law firm but a firm of 'heir hunters' or similar - they try to get a fee for finding lost beneficiaries?

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Posted

Hi doodle,

 

Thank you so much for the information. The whole thing is definitely above board, i.e. real relative, real solicitor.

 

I think you're probably right. There maybe no cash as such but, GB being what it is, a property somewhere. The solicitor will want to know if his fees can be covered. I hadn't even thought of inheritance tax, Mr. Osborne will want his cut as well! Ah well, Schufa here I come, I suppose.

 

Very many thanks indeed.

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Posted

You can't inherit a debt in the UK, but you can in Germany. You get the whole estate, assets and liabilities. You have some time in which you can reject the inheritance, which you generally would do if you knew it was negative. Whether this affects your situation, and how the inheritance is taxed (according to British or German law) you should seek specialist advice on.

 

IANAL and all that.

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Posted

His inheritance will be subject to tax in Germany because he is resident here. Rates are usually 'worse' than the UK especially if it comes from an indirect relative, like a dotty old aunt or old family friend.

The estate and execution appears to be in the UK, so any debts would not follow him here to be inherited.

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Posted

 

His inheritance will be subject to tax in Germany because he is resident here.

 

The whole estate will be taxed in the UK because that is done before anything is distributed.

 

Then just keep quiet (for close relatives the taxation in UK can easily be higher - depending on amount & relationship to the deceased).

 

Some time ago two recently-retired (& senior) Finanzbeamter here independently told me that since the estate was in the UK it didn't interest here. Was slightly surprised but seemd not to be a good idea to continue to ask questions until I got the answer I did not want. In this case the taxation taken by the IR was factors over what it would have been in Germany :(

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Posted

Yes, it's taxed in the UK first but if he is resident here then it is also subject to tax here also (double-taxation), the result of which may well be that after assessment here he need pay nothing.

I also received the hint from my tax advisor and practically of course, if you don't start transferring chunks of >€10K to Germany on a weekly basis, they're probably never going to find out.

However, if you file tax returns failing to mention it -and you did owe the tax man here some money- there is always the potential for a nasty surprise in the future (as some people with money parked in Switzerland are finding out).

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Posted

 

Yes, it's taxed in the UK first but if he is resident here then it is also subject to tax here also (double-taxation), the result of which may well be that after assessment here he need pay nothing.

I also received the hint from my tax advisor and practically of course, if you don't start transferring chunks of >€10K to Germany on a weekly basis, they're probably never going to find out.

However, if you file tax returns failing to mention it -and you did owe the tax man here some money- there is always the potential for a nasty surprise in the future (as some people with money parked in Switzerland are finding out).

 

You really are misleading and yet you keep answering this question on same subject with incorrect answers.

 

 

His inheritance will be subject to tax in Germany because he is resident here.

Only if it exceeds the Threshold and again here in reply to a similar question, Post#2

 

In this case the Op does not know what the amount is so how can you even say he will be liable for any taxes at all, let alone here in Germany.

 

FYI, the threshold in the UK is £325,000 and here in Germany is €400,000

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Posted

 

You really are misleading and yet you keep answering this question on same subject with incorrect answers.

 

Unfortunately you are misleading as well.

 

 

FYI, the threshold in the UK is £325,000 and here in Germany is €400,000

 

The threshold in Germany depends on the relationship to the deceased. I have page 3(3) of Section 9e of Steuertipps für Angestellte in front of me.

 

€400,000 is the personal threshold only for children, & grandchildren (but only if their parents are dead) plus step-and adoptive children.

 

For grandchildren (where at least 1 parent alive) its €200,000

 

Essentially after that is down to €20,000

 

The OP has not stated that he is child of the deceased.

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Posted

The UK threshold is fairly high and the tax is on an estate-wide basis. So whether the estate is split 5 ways or all goes to one person the tax is the same. Only exception is spouse (or civil partner) who normally has no bill.

 

Also if someone dies after their spouse, that can double the allowance (basically you get both people's allowances).

 

You're more likely to have some German tax payable. If you're unlucky enough to have both*, check the tax treaty, some have provisions giving you credit for one tax against the other.

 

*well in a way lucky because it means there's a big inheritance...

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Posted

 

Unfortunately you are misleading as well.

Hem

 

that was directed at MrNosey or did you not understand "FYI" with the exception as you clearly mnetioned regarding the relationship of the deceased to the beneficiaries here in Germany.

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Posted

Mornin' all,

This has been really informative. Many thanks indeed for the input.

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Posted

 

You really are misleading and yet you keep answering this question on same subject with incorrect answers.

 

Only if it exceeds the Threshold and again here in reply to a similar question, Post#2

 

In this case the Op does not know what the amount is so how can you even say he will be liable for any taxes at all, let alone here in Germany.

 

FYI, the threshold in the UK is £325,000 and here in Germany is €400,000

 

YOU are misleading - being SUBJECT to tax is not the same as NEEDING TO PAY tax after an assessment.

He is resident in Germany for tax purposes, ie subject to tax on his income - even when it is 'earned' in the UK. That does not necessarily mean he will need to pay anything and I did NOT say that he would definitely need to, though he may after assessment, especially as (reading between the lines) the inheritance does not appear to be from a direct relative. Inheritance tax rates get quite punishing in Germany when you get money from uncles, aunts and more distant relatives or associates. Eg inheriting from an uncle, your tax free limit IIRC is somewhere around €10k and on anything above that you pay ~17% inheritance tax for Class II. Class III inheritance rates are even worse, something like 30% and a lower tax free limit).

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Posted

 

YOU are misleading - being SUBJECT to tax is not the same as NEEDING TO PAY tax after an assessment.

 

 

I've just inherited about 150,000EUR from my dad.

Your reply

 

 

Firstly, yes you will be liable for tax on that inheritance. I don't remember the % off the top of my head but it is from a direct relative so is at the lowest rate.

and LIABLE for tax is not the same as SUBJECT to tax.

 

Thanks for pointing out I am misleading, scratches head.

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Posted

So you drag up a different thread from the past about which there has been NO reference here and nobody else has referred to it. Well, you're welcome to keep trying it on but you should know I'm quite happy to keep going back and forward on this for longer than you are.

 

I recently had the pleasure of being involved in a situation of inheritance from a UK uncle where the recipient was resident in Germany. In such cases (more indirect family members or plain old acquaintances) Germany sucks considerably more tax from you than the UK due to its classification system w.r.t. your closeness to the deceased.

 

You also need to go swallow a dictionary because liable means "being in a position to incur", "subject to appropriation", "exposed or subject to some usually adverse contingency or action".

 

Besides that, the golden rule of TT is to always consult a professional. Asking TT for an opinion on visa regulations, taxation or anything else that has legal and/or financial implications is just a first step to check out the lie of the land.

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Posted

Mr Nosey, would you kindly clarify a simple point for me? I and my children will be receiving my mother's inheritance in the near future. We are resident here in Germany but the estate stems mostly from Ireland, where the inheritance rules are more simlar to here, i.e. the tax thresholds are based on relationship. We will not exceed the thresholds in either country.Therefore do I have to declare the inheritance here, even if I do not transfer anything here? Naturally any interest eventually arising from it will have to be declared. (Just checking the lie of the land before I truck off to the Steuerberater!)

 

To everyone: am just reinforcing the oft repeated advice to make a will, especially for expats who tend to have bits and pieces in different countries, and make sure it clarifies every aspect of your intentions. Even though my mum did make a plain and simple will with a solicitor, all sorts of small complications have arisen over for example, the status of our joint account, questions of domicile and residence, leading to endless form filling, providing written evidence for this and that, and more legal expenses. All at a time when you just want to cry.

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