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Hi all My mother died in September and I've been putting off applying for a probate grant but I've made an attempt at completing application for probate form, (PA1) https://www.gov.uk/government/publications/apply-for-probate-form-pa1 and Inheritance Tax IHT205(2011) https://www.gov.uk/government/publications/inheritance-tax-return-of-estate-information-iht205-2011. I've read HMRC guidance notes but I think I'm missing something when completing the online version IHT205 because it flags up that my mother's estate could be liable for Inheritance Tax. I've carefully assessed Mum's assets and liabilities and assumed that once these were entered online it would automatically make the deductions but it doesn't appear to do this. My mother and father took out an equity release mortgage which amounts to £175,000, the property has been valued for probate at £375,000 so I would assume that the mortgage and any other liabilities should be deducted from the property value and other assets. Does anyone know what I'm doing wrong? Should I deduct the liabilities from the assets myself before adding them to the online application? If not, I'll give HMRC Helpline a ring in the morning. Thanks for reading, hope this makes sense.
