oops leaving it til last minute, am i really gonna have to pay 1/2 my inheritance back as tax??

boohoo2022

hi, i am both self employed and employed part time/ casual, on the low income grade but still a tax payer. This year i got a large inheritance from the death of  close relative. I immedaitely put it into a couple of ISAs (one already open, one new).

I am now filling out my tax return, expecting it all to be simple as the accounts are very straightforward for the self employment part, and added the inheritance into the "other income" section.

The calculation for tax is astronoimical! It didnt even occur to me to keep half of it back to pay the tax bill- is that normal? I am going to have to close one of the ISAs early (so lose all the lovely interest too) to be able to pay it.

Am i being horrendously stupid? Please someone tell me if this is correct or i have missed something that prevents such a horrible trick happening to me!!

thanks

boo

Jeremy535897

An inheritance isn't income, unless you have been told by the executor to declare some small part of it as income arising after death that is due to you, and does not belong on your self assessment return.

Keep_pedalling

Your inheritance is not subject to tax, it is not income. Any tax due on your relatives estate would have been paid by the executors before distribution to the beneficiaries.

Edit your return and remove you4 inheritance.

kazwookie

Take it off your tax return, it is not subject to tax

TadleyBaggie

As has been said, an inheritance is not taxable on the individual. If the estate was large enough then IHT may have been due, but that is taken out of the estate.

boohoo2022

thanks all, thank goodness it was just my naivity and not the state of play. phew!!

Growingold

boohoo2022 said:

hi, i am both self employed and employed part time/ casual, on the low income grade but still a tax payer. This year i got a large inheritance from the death of  close relative. I immedaitely put it into a couple of ISAs (one already open, one new).

I don't know how much your large inheritance amounts to but remember you can only subscribe £20,000 in total to a Cash ISA and/or SS ISA this tax year.  It doesn't matter whether it was an old or new ISA new deposits are limited to £20,000