Inheritance tax related - repayment of loan to execute will

feelingsuelawley

Apologies if this is off topic for this board, but I'm not quite sure where else it would fit in.

My wife and I are the executors of my father's will. We (and our children) are also the sole beneficiaries of the will.

If my father were to loan us a sum of capital from his investments, would we have to physically repay that loan to his estate prior to executing the will, or could we simply account for it on paper as an asset of the estate in IHT calculations and asset distribution etc?

Not seeking to do anything to avoid IHT or fiddle the estate here, just confirm if the loan has to be repaid?

Context being that I would use the loan to pay off our mortgage which would be a difficult sum to raise and pay into the estate.

Thanks in advance for any help and please feel free to suggest a more appropriate board for the question if needed.

00ec25

no you do not have physically repay the loan if there is sufficient cash in the estate to cover all its other liabilities

Keep_pedalling

This is the sort of loan that tends never to be paid back in the lender’s lifetime, so if your fathers estate is in IHT territory then this would better to be a gift rather than a loan.

That would of cause either need a matching gift to the other beneficiaries or a change to his will to take the gift into account.