IHT question

taxing

SeniorSam wrote: »

HI Bill,

The liability for any IHT on her estate is the responsibility of the Executors to pay from the estate and not you. If she made the gifts to you and your wife and she died within the 7 years, then any additional tax that those gifts may attract to her estate is the estates responsibility and need not come out of your gifts, unless you feel you would like to be generous.

Gifts made to others are usually made in good faith and unless she stated that if she died within the 7 years, any tax liability would have to be met by you and your wife, then your gifts are not taxable.

Are you sure that her estate is liable for IHT? If she was married and her husband died before her, leaving his assets to her, the there are two nil rate band allowances free of tax before IHT is chargeable. So £650,000 before tax.

Hope this helps

Sam

In case no one else picked this up - IHT on FAILED PETS is due by the recipient of the gift.

The Executor may include the details on the IHT400 BUT it is the recipients responsibility TO MAKE SURE that he does as the law strictly requires the return from the recipient of the gift.

The practice of the Executor dealing with it is because he too needs to know about lifetime gifts for calculating the death estate tax if allowed out of convenience.

Regards.

billy78

Well I'm 99.9% sure that the executor knows about the gifts. My wife does recall mentioning them to him 5 or 6 months ago.
If, as Taxing states above, the responsibility for IHT on our failed PETS is ours, then is it best for me to go straight to HMRC and sort this out?
Frankly, we just want to rid ourselves of this cloud hanging above us. Whether that means paying 40k, 20k, 15k or whatever.

Thanks, Bill

taxing

billy78 wrote: »

Well I'm 99.9% sure that the executor knows about the gifts. My wife does recall mentioning them to him 5 or 6 months ago.
If, as Taxing states above, the responsibility for IHT on our failed PETS is ours, then is it best for me to go straight to HMRC and sort this out?
Frankly, we just want to rid ourselves of this cloud hanging above us. Whether that means paying 40k, 20k, 15k or whatever.

Thanks, Bill

If the lady died in November 2010, the IHT will be due for payment by the end of this month as the IHT is due on the earlier of the date of submitting the IHT account IHT400, or within 6 months after the month of death. Interest is charged for late payment.

As other posts have said, I find it hard to believe that the IHT account has not gone in as the Executor needs to have an HMRC receipt for the IHT account & payment before the Grant (Probate) will be issued. Without Grant, the Executor cannot administer the estate.

It could be, and again as was said, that there was no IHT to pay on the estate because of an enhanced nil rate band on death.

You should approach the Executor for clarification and without delay. It is not unreasonable for you to be concerned nor for you to be seeking reassurance.

And, yes, you can, for a fee make a standing search at the principal registry and a copy of the Grant will be sent to you providing it was made within 12 months before or within 6 months after your application. The period can be extended, I believe on payment of a further fee but I am sure if you phone them they will explain the procedure for you.

Regards.

billy78

Thanks Taxing,

I'm going to try and call the executor tomorrow.
Other than enquiring as to whether our gifts have definitely been taken into consideration and the general 'is anything else expected of us' vague question, is there anything else I should be asking at this stage?

Again, thanks to all for your views on this.
Bill

taxing

billy78 wrote: »

Thanks Taxing,

I'm going to try and call the executor tomorrow.
Other than enquiring as to whether our gifts have definitely been taken into consideration and the general 'is anything else expected of us' vague question, is there anything else I should be asking at this stage?

Again, thanks to all for your views on this.
Bill

All you need to know is , is there any IHT due on your failed PET(s) and if so, how much. You need to know because the payment date is looming large.

Regards.

billy78

I suppose the question is what was the content of the letter/addendum to the will that neither my wife or I have seen. Anyone know whether this is commonplace in incidences such as this? What could the letter feasibly state? Why would we not get a copy of it? As I said before, this was drawn up a year after we received the gifts.
We know that our friends accountant was aware of the letters content. Our main concern is that the executor may be scheming something as he's part of her family and they may not be happy with the fact we received the gifts.
Is legal advice the best way forward?

billy78

Hi all,

I've now spoken with the executor.
Estate looks to be in the region of 800k, although they haven't finished with the calculations quite yet.
Worryingly, however, they seem to think they have 9 months to do this. All posts on this thread have stated 6 months. Any reason why this would be 9 or are they sinply incorrect?
As pointed out previously, interest will be due. Will we be liable for this interest even though it is the executors who are dragging their feet?

Regards, Bill

SeniorSam

If any inheritance tax is delayed beyond 6 months, then interest will be added. Any reason why the Executors cannot make an assumed payment to satisfy the Probate court and adjust afterwards. It does seem a long time for Executors to calculate the liabilty and make a payment. Perhaps speak with the Probate office for clarification on advance payment?

Sam

billy78

Apparently the executor has been changed as the initial executor has suffered another bereavement within their family.
To whom will the interest be liable - the estate or will we be required to pay interest on the tax we owe?

Thanks, Bill

SeniorSam

The executors of the estate will need to pay before Probate is granted and before distribution to beneficiaries. Unfortunately, the beneficeiries get less as the estate is reduced in value. In view of the changes of Executors, it may be worth asking the Probate office if they would extend the 6 moths deadline. You never know, they may be sympathetic?

Sam