Re wills and IHT on first death

joe134

getmore4less wrote: »

try
https://www.gov.uk/government/collections/inheritance-tax-forms

pdf versions to print off.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/459092/IHT205_2011_.pdf
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/730619/IHT206-2011.pdf

Thanks G, really grateful.
I will read them one at a time , clear any doubts, and proceed to next.
Just read first, probate.seems pretty straight forward.

joe134

Hi Guys, regarding executors accessing deceased ones a/c , after both of us have gone to pay IHT if it is required before Probate has been granted.
I believe the executor can access one of the deceased ones a/c ‘s by asking the bank to pay it direct to the Hmrc without passing through the executors, and executors not having to find the money themselves
Placing them in financial problems.

I my case, I/we have several accounts in separate names, with various banks,fixed rate, savings a/c’s , and easy access, a/c’s ,Ns&i a/c’s .
Plenty to pay any IHT required.
However, all accounts are linked to one a/c in joint names , with Hsbc.
If there are not sufficient funds in Hsbc, how does the executor get it from one of several of the linked a/c’s?
Do they have to ask one of the linked banks if they would transfer it to Hsbc then to HMRC. We do keep a fair bit of funds in the Hsbc current a/c, but cannot always guarantee this , until IHT is due.

Imelda

From my experience, my advice would be:

LPAs - draw them up before you need them
Admin- a folder with a copy of the last statement for each account. Close any old dormant accounts with a few ££ in.
Shares - if you still have certificates, keep them somewhere safe.
If you are going to use tax allowances such as £3k a year gifts/ gifts out of income, keep records, download the IHT400 annex and complete it as a record, your Executors will thank you!
Letter of wishes - leave a letter explaining what you want done with your personal items.
De clutter - Swedish death cleanse.

As others have said most banks will pay IHT directly to HMRC by way of an IHT423 form.

Funeral costs can be paid directly by the deceased's bank, take the invoice in with a death certificate and they will usually issue a cheque payable to the undertaker. Reasonable funeral costs are the only deduction allowed against an estate - the cost of administrating the estate are not an allowable deduction.

If you leave more than 10% of your estate to charity the IHT rate payable on the rest of your estate is 36%.

joe134

Thanks Imelda.
Myself and wife Want to gift money to our great grandson.
We were just going to leave him it in the will, but I think it would be better to get his Mom, our Grandaughter to open a junior ISA up, and we’re gift him his annual allowance £4350? Every year until we decide to stop because of it’s enough, or we die.
As long as no other member of the family set another one up, we keep the book, and it can then be passed to either his Mom or Grandmom, our daughter who can carry on paying into it until he is 18.
We did this for my Grandaughter, but we kept the book until she was 21, (Her choice) and gave it to her then.
Her’s was an ordinary ISA, not Jisa.
As my wife and I are allowed £3k each every year to gift , IHT free , we would be gifting this out of income.

When a gift is made jointly, as we have done in the last 7 years, when first one dies, is the gift split for IHT purposes?
What goes on the Iht205 form on first death under gifts?
Is it half the amount gifted?
Appreciate any advice.
Slowly working my way through this moral maze.��

Malthusian

joe134 wrote: »

When a gift is made jointly, as we have done in the last 7 years, when first one dies, is the gift split for IHT purposes?

Correct, it's half from each of you.

Imelda wrote: »

If you leave more than 10% of your estate to charity the IHT rate payable on the rest of your estate is 36%.

It's actually 10% of the net estate, meaning after the nil rate bands and any other reliefs have been deducted. This is often overlooked.

So if you have a a £2 million estate and two NRBs and RNRBs totalling £1 million after April, and no other complications, your net estate is £1 million and you have to leave £100,000 to get the reduced rate, not £200,000.

This is not free money to your heirs because if you leave them the whole lot they get £1.6 million (after £400k IHT) and if you leave £100k to charity they get £1.576 million (after £324k). But your chosen charities get £100,000 at the cost of £24,000 to your heirs, so unless you hate absolutely everybody in the world apart from your heirs and the Government, it's a pretty good trade off.

(This point is also overlooked as many would assume that if a 10% gift to charity means a 10% IHT discount then it must net off. See also the 6.25% tax on Lifetime ISAs for access before age 60 / qualifying house purchase.)

joe134

Malthusian wrote: »

Correct, it's half from each of you.



It's actually 10% of the net estate, meaning after the nil rate bands and any other reliefs have been deducted. This is often overlooked.

So if you have a a £2 million estate and two NRBs and RNRBs totalling £1 million after April, and no other complications, your net estate is £1 million and you have to leave £100,000 to get the reduced rate, not £200,000.

This is not free money to your heirs because if you leave them the whole lot they get £1.6 million (after £400k IHT) and if you leave £100k to charity they get £1.576 million (after £324k). But your chosen charities get £100,000 at the cost of £24,000 to your heirs, so unless you hate absolutely everybody in the world apart from your heirs and the Government, it's a pretty good trade off.

(This point is also overlooked as many would assume that if a 10% gift to charity means a 10% IHT discount then it must net off. See also the 6.25% tax on Lifetime ISAs for access before age 60 / qualifying house purchase.)

Thanks M much appreciated.