Gift Tax from an Executors Account?

lawrenson

Hi,

Hope someone can answer what is hopefully a quick question please?

My aunt recently died intestate.

My father has inherited everything.

What he wants to do is open an Executors Account with the bank for various outgoings.

From this account he also wants to give various monetary gifts to members of the family.

The question is, if he dies within 7 years, will the gifts from the Executors Account be liable for tax?

Many thanks in advance for an answer (hopefully!)

Cheers,
karen

sdooley

karen,

there is only inheritance tax if your aunt's stuff plus your father's stuff could be over the threshold, i.e. £300K odd. also any small gifts (max £250 per person per year) will be ignored.

using an executor's account for gifts is not relevant to whether there is inheritance tax or not. If your father is going to have inheritance tax on his estate when he dies, and the gifts he is going to make are substantial, it is possible for him to redirect the gifts he receives by varying his entitlement from the estate - a deed of family arrangement it is sometimes called. This can be done within 2 years of your aunt's death and means the gifts are treated as coming from her and not from your father.

You don't say whether there is inheritance tax to pay on your aunt's stuff now?

lawrenson

Hi,

thanks for the reply.

No, there is no inheritance tax on my Aunts estate.

There is no Will either - I thought a Deed of family arrangement could only be on a Will?

Cheers,
karen