Any way to reduce inheritance tax after a person has died?

unlucky67

My uncle (unmarried, no children) died a couple of weeks ago. Just found out my sister and I are the executors and we will be going to the solicitors in a week or so. From what I understand it seems like the estate is to be divided between me and my 3 siblings.
He had a will and had had similar problems with my grandmother's and great aunt's estate so my dad is surprised that his brother wasn't more organised. No idea of the exact amounts involved but we will be paying inheritance tax. There is a small house (worth approx £120k) but the rest is cash/shares.
Is there anything (legal) we can do now to reduce the tax burden?
(just realising how unfair this tax is - we are not talking millions, it is money which has been earned through hard work (and taxed!) and he had it because as a family we are careful with money - no expensive holidays etc...
Makes me wonder what the point of saving money is...might as well blow it all having a good time and then let the state to look after you...paid for by someone else's inheritance tax..

McKneff

How much is the estate in total.
No one can help if you dont give all the details

unlucky67

I don't know how much ....I think approx £800k (inc house)
Only just found out I am an executor ...and haven't seen any paperwork etc (I live 300 miles away) and my family are a bit secretive...

Just wondering if there is anything that is worth looking into?

CLAPTON

unlucky67 wrote: »

My uncle (unmarried, no children) died a couple of weeks ago. Just found out my sister and I are the executors and we will be going to the solicitors in a week or so. From what I understand it seems like the estate is to be divided between me and my 3 siblings.
He had a will and had had similar problems with my grandmother's and great aunt's estate so my dad is surprised that his brother wasn't more organised. No idea of the exact amounts involved but we will be paying inheritance tax. There is a small house (worth approx £120k) but the rest is cash/shares.
Is there anything (legal) we can do now to reduce the tax burden?
(just realising how unfair this tax is - we are not talking millions, it is money which has been earned through hard work (and taxed!) and he had it because as a family we are careful with money - no expensive holidays etc...
Makes me wonder what the point of saving money is...might as well blow it all having a good time and then let the state to look after you...paid for by someone else's inheritance tax..

how hard did you work for this inheritance?

Dunroamin

There's only one thing that's unfair about inheriting £200K and it isn't having to pay tax on it!

Pennywise

A will can be varied by deed of variation if all the beneficiaries agree.

Have a look at the new charity beneficiary rules introduced last year - you can give some of the inheritance to charity and benefit from more than the IHT rate of 40% in tax relief.

Yes, it's a shame he didn't spend more of his wealth and enjoy it, but that's life. You can't take it with you.

If he'd been bothered, he could have done things during his life to minimise the IHT on death, i.e. annual gifts, payments out of income, gifts on marriage, etc., or even given the next generations loans or mortgages to help them. Sadly a lot of older people just sit on their money and don't make it work for them nor their family.

Another couple of points. Was he ever married and was any of the money invested in his own business or business partnership as at the date of death?

getmore4less

If you plan to actualy act as executor you need to break through the family secrecy quickly.

If you don't know what you are doing start with forms PA1 and IHT205 IHT400

Look these up and find them yourself along with the notes, you will need to use internet searches a lot.

The important thing if there is around £800k is if any of this was inherited in the last 2 year(time is of the essence) since it might be possible to do deed of variation on those to reduce the tax

there are also some rules on subsiquent quick deaths that incur tax twice these may be worth looking into.

there are some other exemptions for certain types of assets.

In the absence of those option I am not sure if there is much you can do.

Remember you are not paying the tax and the uncle was obviously happy(or did not care) to pay the tax since there were things he could have done while alive.

le_loup

Any way to reduce inheritance tax after a person has died?
Sure is. Do a Deed of Variation to pass all the proceeds to charity. No IHT will then be payable and you and your siblings will then feel very good rather than feeling that you have to moan about a big slug of money, to which you have contributed nothing, coming to you completely undeservedly!
Unfair?

roddydogs

You cant "Just find out" you were Executors, it had to be agreed in advance.

lcharm

roddydogs wrote: »

You cant "Just find out" you were Executors, it had to be agreed in advance.

Very good point there!!

Although there doesn't need to be an executors signature just witnesses so he could have just put their names down without consulting them.

Alternatively, if the will was written a long time ago, they may have been asked, accepted and completely forgotten which is a good possibility too because details of a Will can become forgotten after a few years.

ognum

Was you uncle married is there transferable IHT from the death of a spouse?