Inheritance help

Jaffab123

I am new to all this so here goes. My mum has been retired for many years and is i believe going to 
receive an inheritance from her brother who died recently, it could be a substantual amount.
I would like some guidence please anyone with a few questions i have. Question 1 How does inheriting
money affect benefits.
Question 2 How does inheriting money affect pension.
Question 3 does it make any difference that her brother lived in another country.
Question 4 How can she make sure that she doesnt end up losing a large  amount to the taxman etc
as for so many reasons this seems unfair.

kaMelo

1. What benefits does she claim?
2. It doesn't affect state pension.
3. No
4. Her brothers estate may be subject to IHT if it's large enough however your mothers inheritance shouldn't be taxable. The only scenario I can think of where tax may be due is if the inheritance comes from her brothers pension and he was over 75 when he died. (I'm sure others will correct me if I'm wrong here)

Robin9

It will take time - particularly if there is a property to sell -   think 12 months.  The overseas aspect may also cause additional complications.

la531983

Jaffab123 said:

I am new to all this so here goes. My mum has been retired for many years and is i believe going to 
receive an inheritance from her brother who died recently, it could be a substantual amount.
I would like some guidence please anyone with a few questions i have. Question 1 How does inheriting
money affect benefits.
Question 2 How does inheriting money affect pension.
Question 3 does it make any difference that her brother lived in another country.
Question 4 How can she make sure that she doesnt end up losing a large  amount to the taxman etc
as for so many reasons this seems unfair.

Why does it seem unfair? The point of benefits is to help those with no money, if she has a few ten thousand in the bank why do you think the same rules should apply to your mum? And inheretances are taxed. Sorry to be blunt.

She can gift the entire legacy to charity if she doesn't want the burden of the cash. 

Keep_pedalling

1. It will reduce or stop means tested benefits.

2. Makes no difference to her pensions.

3. No. 

4. Inheritance tax may be payable by his estate depending on the country he lived in, but she will pay no tax on her inheritance apart from income tax if she earns enough interest on the capital sum.

p00hsticks

la531983 said:

Jaffab123 said:

I am new to all this so here goes. My mum has been retired for many years and is i believe going to 
receive an inheritance from her brother who died recently, it could be a substantual amount.
I would like some guidence please anyone with a few questions i have. Question 1 How does inheriting
money affect benefits.
Question 2 How does inheriting money affect pension.
Question 3 does it make any difference that her brother lived in another country.
Question 4 How can she make sure that she doesnt end up losing a large  amount to the taxman etc
as for so many reasons this seems unfair.

And inheretances are taxed. Sorry to be blunt.

Blunt, but incorrect. Inheritances AREN'T Taxed - at least not in this country. An estate may pay inheritance if over a certain amount (in some cases over £1 million), but the beneficiaries aren't taxed on their inheritance.

Keep_pedalling

la531983 said:

Jaffab123 said:

I am new to all this so here goes. My mum has been retired for many years and is i believe going to 
receive an inheritance from her brother who died recently, it could be a substantual amount.
I would like some guidence please anyone with a few questions i have. Question 1 How does inheriting
money affect benefits.
Question 2 How does inheriting money affect pension.
Question 3 does it make any difference that her brother lived in another country.
Question 4 How can she make sure that she doesnt end up losing a large  amount to the taxman etc
as for so many reasons this seems unfair.

She can gift the entire legacy to charity if she doesn't want the burden of the cash. 

No she can’t, that would be deliberate deprivation of assets and would still lose the benefits. 

la531983

p00hsticks said:

la531983 said:

Jaffab123 said:

I am new to all this so here goes. My mum has been retired for many years and is i believe going to 
receive an inheritance from her brother who died recently, it could be a substantual amount.
I would like some guidence please anyone with a few questions i have. Question 1 How does inheriting
money affect benefits.
Question 2 How does inheriting money affect pension.
Question 3 does it make any difference that her brother lived in another country.
Question 4 How can she make sure that she doesnt end up losing a large  amount to the taxman etc
as for so many reasons this seems unfair.

And inheretances are taxed. Sorry to be blunt.

Blunt, but incorrect. Inheritances AREN'T Taxed - at least not in this country. An estate may pay inheritance if over a certain amount (in some cases over £1 million), but the beneficiaries aren't taxed on their inheritance.

Well yes that's what I meant. 

la531983

Keep_pedalling said:

la531983 said:

Jaffab123 said:

I am new to all this so here goes. My mum has been retired for many years and is i believe going to 
receive an inheritance from her brother who died recently, it could be a substantual amount.
I would like some guidence please anyone with a few questions i have. Question 1 How does inheriting
money affect benefits.
Question 2 How does inheriting money affect pension.
Question 3 does it make any difference that her brother lived in another country.
Question 4 How can she make sure that she doesnt end up losing a large  amount to the taxman etc
as for so many reasons this seems unfair.

She can gift the entire legacy to charity if she doesn't want the burden of the cash. 

No she can’t, that would be deliberate deprivation of assets and would still lose the benefits. 

Honestly never knew this, useful to know. Can people refuse a legacy then? 

kaMelo

p00hsticks said:

la531983 said:

Jaffab123 said:

I am new to all this so here goes. My mum has been retired for many years and is i believe going to 
receive an inheritance from her brother who died recently, it could be a substantual amount.
I would like some guidence please anyone with a few questions i have. Question 1 How does inheriting
money affect benefits.
Question 2 How does inheriting money affect pension.
Question 3 does it make any difference that her brother lived in another country.
Question 4 How can she make sure that she doesnt end up losing a large  amount to the taxman etc
as for so many reasons this seems unfair.

And inheretances are taxed. Sorry to be blunt.

Blunt, but incorrect. Inheritances AREN'T Taxed - at least not in this country. An estate may pay inheritance if over a certain amount (in some cases over £1 million), but the beneficiaries aren't taxed on their inheritance.

Not quite. In most circumstances yes it's correct beneficiaries are not taxed however should an inheritance come from an uncrystallised pension fund and the benefactor is over 75 then the inheritance is taxable at the beneficiaries marginal rate. 

la531983 said:

Keep_pedalling said:

la531983 said:

Jaffab123 said:

I am new to all this so here goes. My mum has been retired for many years and is i believe going to 
receive an inheritance from her brother who died recently, it could be a substantual amount.
I would like some guidence please anyone with a few questions i have. Question 1 How does inheriting
money affect benefits.
Question 2 How does inheriting money affect pension.
Question 3 does it make any difference that her brother lived in another country.
Question 4 How can she make sure that she doesnt end up losing a large  amount to the taxman etc
as for so many reasons this seems unfair.

She can gift the entire legacy to charity if she doesn't want the burden of the cash. 

No she can’t, that would be deliberate deprivation of assets and would still lose the benefits. 

Honestly never knew this, useful to know. Can people refuse a legacy then? 

People are free to do whatever they want with their money including giving it away.. Whether qualification for a means tested benefit is affected by doing so is a completely separate question.

TELLIT01

kaMelo said:

People are free to do whatever they want with their money including giving it away.. Whether qualification for a means tested benefit is affected by doing so is a completely separate question.

True, but when the OP asked about potential effect on benefits it would have been unhelpful simply to say the recipient of the inheritance can give it away if they wish.  Doing so, based purely on that advice, could have major ramifications for anybody receiving income related benefits.