Beneficiaries liability to tax

sterlingsafeguarder

I would welcome any comments/advice on this matter.

dzug1

The solicitor may be liable for the tax bill, yes. Depends on what procedures he followed.

But he has the right to recover the money from the estate - ie the beneficiaries. Whether he is successful in doing so is more a question of practicality than law.

sterlingsafeguarder

Thanks for your reply.

troubleinparadise

I am in no way any legal expert, and Dzug may well be right, but my thoughts lay with yours in that it would seem that the solicitor acting as executor has made a basic error in distributing the residue before ensuring all tax has been paid, and therefore the solicitor/executor who would be liable for debts later discovered.

As Dzug says though, perhaps there were procedures followed that you are not aware of, perhaps that warned the beneficiaries of the likelihood of an outstanding tax bill?

I was also under the impression that a solicitor might well have some indemnity insurance that would cover in this situation? This sounds like professional negligence - you wouldn't expect this situation to arise when someone who has professional knowledge of the law administers an estate.

Best to take proper legal advice on this matter!

getmore4less

the executors of mother estate need to deal with this. If they covered themselves with the notice then the cousins executors will need to chase.


they may have a letter showing that the mother agreed to the distribution subject to the potential of a liability

sterlingsafeguarder

Thank you for your comments "trouble in paradise."

John_Pierpoint

Lot is know how this pans out.

I am just asking myself the following questions:
Why were the policies written in the Isle of Man?
Do you expect HMRC to back off from demanding the tax?
Is the state's right to obtain this tax the result of a recent judgement on a long disputed case?
Did the beneficiaries receive a good service including accounts and certificates of deduction of tax from the accrued income?
Have they now received an explanation of the additional income (?) tax?
Exactly how was the solicitor-executor, of the estate number one, appointed? Personally or as a member of "a firm". (probably LLP) ?

Did the executors of the second estate go through the formalities of "a section 27 notice" and the two months and specified date have expired?
www.london-gazette.co.uk/documents/deceased-estates-notes‎

http://www.hmrc.gov.uk/manuals/tsemmanual/tsem7256.htm

http://www.hmrc.gov.uk/manuals/chmanual/CH53000.htm

Don't expect any mercy if you misjudge a liability date from HMRC, so what is sauce for the goose is sauce for the gander.