Bit of a crappy situation

[mudskipper]

The relevant law is here - you need to look at section 141 at the start of chapter V.



Not sure if that means you still pay 100% of the tax because it's less than a year, or if you get 100% relief because it's been less than a year

I read it as tax chargeable is reduced by 100%

[TheFaQQer]

When you are writing to HMRC, explain the situation and make sure that your solicitors arranges for your grandfathers estate to come to the next in line (hopefully you). If your solicitor says otherwise, find a new solicitor.

You don't need to do anything - the estate passes to whoever the mother leaves it to, with no tax to pay on the part of the estate already inherited in the past year that has already been taxed.

[TheFaQQer]

I read it as tax chargeable is reduced by 100%

Yes, I re-read it more carefully and edited accordingly

[d000hg]

What does confuse me is why is your grandfathers estate going to the sister in law. Once your father died that estate would normally go directly to the grand children

Short answer: because that's what his will says

Longer answer: when my father was diagnosed with terminal cancer a few years back, my grandfather initially wished/assumed that his estate should go to his line i.e. his father's children aka me. He either changed his will accordingly or found he didn't need to.
However my father, while still able to do so, objected. He made it clear his wishes were for his wife to stand in his stead in terms of inheriting, so she would have no needs when he was gone. Grandfather changed his will accordingly.
Mum realised that she had actually been left fairly well off anyway - her income from inheriting my father's pension was enough to live off and although most of their estate is property she had a reasonable nest-egg. So she started investigating a 'deed of variation' to redirect a portion of grandfather's estate directly to me, basically to avoid IHT and on the basis I could use it more than she could.
Which makes the way things played out rather amusing, in a dark way.