Inheritance Taxation Query

Grazzier

Taxation query - After parents passed away earlier this year there was left an total estate fund of approximately 500K. I wondered if anyone can clarify the taxation obligations that myself and siblings may have to deal with please.

So in all there are 5 children. I understand that there is an Inheritance Tax, and it seems to me that the acting solicitor would pay that Tax on our behalf before releasing the remainder. Is this correct thus far ?

Then once the remainder is split evenly between the 5 siblings, am I correct in believeing that a further Tax is levied on each of us again ?
I was thinking that whatever is the remainder divided by 5 and then added to each of our own working incomes that the whole of ones' yearly income becomes taxed too.

Any pointers here will be very much appreciated.

Many thanks in advance for your time and thoughts.

G

Linton

From your description the only tax due is inheritance tax which will be paid by the executor (presumably the solicitor) from the estate prior to distribution of the remainder to the beneficiaries. There is no tax levied on the beneficiaries.

Keep_pedalling

Assuming the first to die left everything to their spouse (I am also assuming they were married) then there would be no tax to pay as their joint nil rate band is £650,000.

Mojisola

Grazzier wrote: »

Taxation query - After parents passed away earlier this year there was left an total estate fund of approximately 500K. I wondered if anyone can clarify the taxation obligations that myself and siblings may have to deal with please.

There may not be any inheritance tax to pay - your parents would have an allowance each of £325,000 - so £650,000.

Unless they used up some of the allowance in gifts prior to their deaths, the estate comes under that.

(Keep pedalling beat me to it!)

Grazzier

Thanks to all for your effort and time in replying to me.

Appreciated very much.


G

Savvy_Sue

Is there a house to be sold? If there is, then there MIGHT be a Capital Gains Tax liability when it is sold. This can be mitigated in some circumstances.