Inheritance Tax Rates...

LurthersBoots

Hi all, just a quick one. Is there a different banding for inheritance tax?
My Partner inherited £***k recently as did her brother and her sister. She has received a tax bill for exactly the same amount of tax as her brother and sister.
Both her brother and sister were employed at the time and she is not....hasn't been employed for 4 years.
Does the rate of tax increase or decrease based upon income?
LB

John_Pierpoint

I think you might be completely confused.

InHeritance Tax is a capital tax levied on the wealth of the dead person, as at the time of death. It cancels any embedded capital gain tax liability within that wealth.

Technically speaking the nominated executor in the will or the applicant for letters of administration, if there is no valid will, is running a trust until the assets are distributed to the beneficiaries.
[the names & rules for administering an estate can differ in Scotland but the process is similar].

Inheritance tax has a nil rate band of £325k (or up to £650k if a couple's estate can be rolled over until the second death)
After that the levy is 40% - there are some exceptions such as "Forestry" but they probably don't apply to you.

During the period of administration the trustee may run up a liability to income tax, but this should be explained to you on a form R185 along with the distribution of capital and accrued income. A non tax payer can reclaim some or all of this tax. Unfortunately professionally administered estates may no enquire about the tax status of the beneficiaries and then try to time the distributions of income to minimise their income tax liabilities. [Little and often potentially being cheaper than all at once at the end of the administation].

http://www.hmrc.gov.uk/pdfs/r185_ei.pdf

Your are entitled to accounts showing how your share was calculated, so ask for them.

If you need further advice, you will need the supply details of dates and amounts - the devil is in the detail. Legally speaking your first request for information should be made to the executor/administrator. It is their job to administer the procedures correctly.

getmore4less

Normaly the administrator deals with the tax and distributes net to benifitiaries.

Ask why this was not done?

was this administed by a proffessional or a lay person?

get a set of accounts.

what numbers are we dealing with.