Tax on inheritance

blueladyange

Hi all
Father in law died in February.
My husband ( eldest son) and his brother were executors as well as beneficiaries to his will along with a couple of other people.
Probate is done and most of the money has been collected ( mainly bank account, premium bonds etc...no property) no inheritance tax needed to be paid.


Now my late father in law had a life assurance policy in his name but lives assured were his two sons (this is with the Prudential)
We informed them and after probate was sent to them they have changed the holders name on the policy to my husbands.
When my husband phoned them to ask about this being cashed in he was told there will be tax to pay on the policy.
My question is does anyone have any idea what % of tax its likely to be as we are a bit confused .....is this tax payable on the whole amount, the profit made since it was invested or just the profit made since his death......nobody seems to be giving a clear answer?
Thank you very much in advance

Yorkshireman99

blueladyange wrote: »

Hi all
Father in law died in February.
My husband ( eldest son) and his brother were executors as well as beneficiaries to his will along with a couple of other people.
Probate is done and most of the money has been collected ( mainly bank account, premium bonds etc...no property) no inheritance tax needed to be paid.


Now my late father in law had a life assurance policy in his name but lives assured were his two sons (this is with the Prudential)
We informed them and after probate was sent to them they have changed the holders name on the policy to my husbands.
When my husband phoned them to ask about this being cashed in he was told there will be tax to pay on the policy.
My question is does anyone have any idea what % of tax its likely to be as we are a bit confused .....is this tax payable on the whole amount, the profit made since it was invested or just the profit made since his death......nobody seems to be giving a clear answer?
Thank you very much in advance

Without knowing the terms of the policy nobody can say. They nned to go back to the campany and ask for exactly what kind of policy it is, beneficiaries etc.

Dox

They also need to ask what sort of tax and what happens if the policy isn't cashed in - the Pru should be well used to helping people through this sort of maze.

Keep_pedalling

It sounds as though the policy is a non qualifying one where profits are treated as income. This tax would payable by your husband and his sibling not the estate.

https://www.gov.uk/government/publications/gains-on-uk-life-insurance-policies-hs320-self-assessment-helpsheet/hs320-gains-on-uk-life-insurance-policies-2015