IHT...again

Jake'sGran

I was discussing the subject of wills with my daughter today and she asked me something I could not answer. One of her friends has been given monies/investments by her father who is terminally ill. I told my daughter that these gifts would be taxable as her friend's Dad has made them quite recently. My daughter wanted to know how the Inland Revenue would know about them. Is there a form issued by the IR to be completed upon a person's death? They obviously need to know about the death of a taxpayer (I assume he is one as he is well off) or are they automatically informed about a death, taxpayer or not?.

tyllwyd

I don't actually know (so hopefully someone who does know will come along later) but my impression was that it is the duty of the executor of the will to make sure that any inheritance tax etc is paid. I imagine that the executors should review any financial documents to see if there is any record of such a transfer. There are forms to be filled in - have a look here for a start
http://www.direct.gov.uk/en/RightsAndResponsibilities/Death/Preparation/DG_10029716

If there are any issues at all, it is best to get professional advice from a solicitor asap - it isn't worth the risk of getting it wrong. I think (although again, I don't know) that an executor could potentially be personally liable for unpaid tax if it comes to light after the estate has been distributed.

Jake'sGran

Thank you for your response. I expect that the lady receiving the monies etc will be the executor as she is his only child so I hope she has the sense to realise that you simply can't ignore these things.

Bossyboots

tyllwyd wrote: »

I don't actually know (so hopefully someone who does know will come along later) but my impression was that it is the duty of the executor of the will to make sure that any inheritance tax etc is paid. I imagine that the executors should review any financial documents to see if there is any record of such a transfer. There are forms to be filled in - have a look here for a start
http://www.direct.gov.uk/en/RightsAndResponsibilities/Death/Preparation/DG_10029716

If there are any issues at all, it is best to get professional advice from a solicitor asap - it isn't worth the risk of getting it wrong. I think (although again, I don't know) that an executor could potentially be personally liable for unpaid tax if it comes to light after the estate has been distributed.

That is correct, the executor will be responsible for paying the tax if it is not met out of the estate and subsequently found out.

They would also be liable to prosecution and to pay interest on the tax that was due.