Iht

Gnittih

What is the IHT situation under the following conditions.

Widower, Estate value £600k now,

Tomorrow I gift £200k to sons.

Next year I die!

How do I stand wrt IHT, and do my sons have to pay?

They are not trustees in my will.

le_loup

Try the Tax board on here.

CLAPTON

Gnittih wrote: »

What is the IHT situation under the following conditions.

Widower, Estate value £600k now,

Tomorrow I gift £200k to sons.

Next year I die!

How do I stand wrt IHT, and do my sons have to pay?

They are not trustees in my will.

better to repost on the tax board

but when you do say what happened when your husband died : did you inherit his entire estate or what : this is vital information because it determines whether your estate has a 325,000 IHT allowance or a 650,000 allowance or something in between

getmore4less

Sons don't pay it would come out of the estate if there was any to pay.

Gnittih

CLAPTON wrote: »

better to repost on the tax board

but when you do say what happened when your husband died : did you inherit his entire estate or what : this is vital information because it determines whether your estate has a 325,000 IHT allowance or a 650,000 allowance or something in between

Sorry the case I want to examine is,
A single person with £600k estate, gifts £200k to cousins,and dies 1year later,leaving same cousins to inherit remainder of estate via will.
How is any IHT paid?

Mojisola

Gnittih wrote: »

Sorry the case I want to examine is,
A single person with £600k estate, gifts £200k to cousins,and dies 1year later,leaving same cousins to inherit remainder of estate via will.

How is any IHT paid?

From the estate before it is distributed to the beneficiaries.

Gnittih

Mojisola wrote: »

From the estate before it is distributed to the beneficiaries.

How much and by whom?

Mojisola

Gnittih wrote: »

How much and by whom?

How much will depend on the exact amount that is left.

The executors pay the bill from the estate.

milla

Gnittih wrote: »

How much and by whom?

Are you asking "Is the estate now £600.000 - £200.000? "


If you are, then I think probably the £200.000 would fall into the taper relief system


http://www.which.co.uk/money/tax/guides/inheritance-tax-explained/inheritance-tax-planning-and-tax-free-gifts/



If tax does become due on a PET, the person who received the PET will be asked to pay the tax. However, the tax due may be reduced because of ‘taper relief’.
This is how taper relief can reduce tax due on PETs:

• If the gift was made less than three years before death, no reduction in tax is due
• If the gift was made three to four years before death, tax is reduced by 20%
• If the gift was made four to five years before death, tax is reduced by 40%
• If the gift was made five to six years before death, tax is reduced by 60%
• If the gift was made six to seven years before death, tax is reduced by 80%

Mojisola

milla wrote: »

If tax does become due on a PET, the person who received the PET will be asked to pay the tax.

Not in the example of £200k -
https://www.gov.uk/inheritance-tax/gifts
Anyone who received a gift from the deceased in the 7 years before they died may have to pay Inheritance Tax if the deceased gave away gifts worth more than £325,000 in that time.

Gnittih

Is there some contradiction here?

Deceased estate is now £600k - £200k = £400k

Tax due £400k - £325k = £75k x 0.4 = £30k

Is this correct?

Do the cousins pay any on their £200k of is it the Will executors who pay the £30k?