Inheritance taxable or something else

Rufty1

A relative has recently passed away.  The son claims to have had power of financial attorney for a number of years for the relative. Having done a search of the Office records nothing ever came up.  But a friend said they did sign something to allow the son financial access, they're just not sure what it was.  As executor I have been looking through the bank statements and someone has clearly been helping themselves to cash and services using the deceased account.  If they claim they were gifts then I assume inheritance tax is due?  Otherwise have they been breaking the law & what can be done?  

Keep_pedalling

Inheritance tax is only payable if the estate exceeds the available nil rate bands. For IiHT purposes the value of the estate will include any non exempt gifts made in the previous 7 years. If IHT is due it will come out of the remaining estate not the gifts unless more than £325k has been given away.

How much is left in the estate and how much was given away / nicked?

Rufty1

Keep_pedalling said:

Inheritance tax is only payable if the estate exceeds the available nil rate bands. For IiHT purposes the value of the estate will include any non exempt gifts made in the previous 7 years. If IHT is due it will come out of the remaining estate not the gifts unless more than £325k has been given away.

How much is left in the estate and how much was given away / nicked?

Thanks.  What's left is only about 140k.  Estimate a grand a month for at least 6 years has gone walkies.  

TadleyBaggie

That would still value the estate well below the IHT threshold once the "gifts" are added.

Brie

Ask son for accounts to show why the money was being withdrawn.  If not forthcoming and he's named in the will I'd be deducting those amounts from his share.  Look him in the eye and see if he blinks.

Rufty1

JamesRobinson48 said:

Presumably the money was withdrawn/spent before the relative passed.  If so, might the son have spent it for his father's benefit?

Will the son inherit most/all of the estate anyway, or do other persons stand to lose out here?

The son is one of two beneficiaries.  The son lived 100 miles away and many of the amounts are for takeaways, or cash (housebound) or hairdressers (the deceased was bald) or vets bills (you guessed it). 

Rufty1

Brie said:

Ask son for accounts to show why the money was being withdrawn.  If not forthcoming and he's named in the will I'd be deducting those amounts from his share.  Look him in the eye and see if he blinks.

Thanks - not sure that's legal and as executor I want to do everything by the book.

Rufty1

TadleyBaggie said:

That would still value the estate well below the IHT threshold once the "gifts" are added.

Thanks.  Aren't there rules about how much value of gifts you're allowed to make?  £3k a year or individual one offs of £250???

kaMelo

Someone can give away any amount of money to whoever they wish, there are no laws to prevent this or gift taxes in the UK. Only once the giver has died, and if their estate is subject to IHT, there may be tax payable from the estate on those gifts, it all depends upon the circumstances.

Daniel54

I had a not  entirely different situation when taking over a POA for an elderly relative and seeing that quite clearly a trusted friend had been helping themselves to cash,having been given access to the card and PIN number.At the time I agreed with my fellow attorney that we would not raise this with my relative as we felt it was an issue which she might well have been aware of,but wished not to make a fuss

These situations are incredibly difficult

Since my relative passed I have not shared this information with my co-executors.There are strong suspicions1 ,but no proofs.

If HMRC had interrogated the bank account I would have needed to say that I assumed the monies were gifts.

From what you have said you are well below IHT territory.Galling though it might be,you have  little if any chance of redress and I would suggest finalising the estate in a timely manner so you can leave this unpleasantness behind you.

user1977

Rufty1 said:

TadleyBaggie said:

That would still value the estate well below the IHT threshold once the "gifts" are added.

Thanks.  Aren't there rules about how much value of gifts you're allowed to make?  £3k a year or individual one offs of £250???

No, you're "allowed" to gift as much as you like, you're talking about the allowed amounts which wouldn't be counted for IHT purposes. But from what you've said, the estate wouldn't have been large enough for Inheritance Tax to be payable in the first place.