IHT 205 - Gifts/extorted monies

underthecosh

Hi,



Concerned about the treatment of 'gifts' for completing IHT 205.


A relative with severe mental health issues recently passed away, they were in crisis this past year and had sums of money extorted from them:



1) large sum resulting in bank account being stopped, police involvement, court case resulting in prosecution so there will be evidence of this and amounts involved)



2) the above situation lead a to a spiral of returning alcoholism, resulting in further extortion by others in differing amounts, given freely as cash over the last 12 months


The original amount of savings was under both the higher IHT threshold and the 150k IHT 400 threshold, however I'm worried that I should report the 'gifts' as they show as cash withdrawals on bank statements, totalling over 3k.


Please advise best way to proceed as we just want to be able to move on from this now as my own mental health has suffered - honestly can't stomach the thought of months of HMRC letters/evidence requirements etc.


TIA

Keep_pedalling

From what you say these were not gifts so should be treated as depts owed to the estate.

How much are we talking about here, both in terms of the money taken and the remainder of the estate?

underthecosh

Thanks for quick response - still waiting on confimration from bank but estimate 15-30k taken and between 5-15k remaining. How would I go about proving/evidencing them as debts? We may need to take them into account if we need to pro-rata any payments to creditors

Marcon

underthecosh wrote: »

Thanks for quick response - still waiting on confimration from bank but estimate 15-30k taken and between 5-15k remaining. How would I go about proving/evidencing them as debts? We may need to take them into account if we need to pro-rata any payments to creditors

As you say, the outcome of the prosecution will give evidence that the first series of payments were not gifts but were extorted. Whether you can get the cash back is, of course, a wholly different matter and you'll need to take proper legal advice on the point as it applies to the estate.

The second round of 'freely given' gifts will need to be treated as just that: gifts.

getmore4less

underthecosh wrote: »

Thanks for quick response - still waiting on confimration from bank but estimate 15-30k taken and between 5-15k remaining. How would I go about proving/evidencing them as debts? We may need to take them into account if we need to pro-rata any payments to creditors

Is the estate insolvent?

Keep_pedalling

underthecosh wrote: »

Thanks for quick response - still waiting on confimration from bank but estimate 15-30k taken and between 5-15k remaining. How would I go about proving/evidencing them as debts? We may need to take them into account if we need to pro-rata any payments to creditors

If that remaining £5-15k is just sitting in a bank account then you should not need to go through probate, banks will normally pay out that amount without needing probate.

If for some reason you still need it, the actual figure you submit do not have to be that accurate as the estate is way below the nil rate band and HMRC will not be querying it.