Inheritance Tax

nellybean1

Sister and I are Executors of late fathers estate.  Inheritance tax has been calculated but IHT form not yet submitted, and we have split the amount proportionately to what we are to inherit. The estate is asset rich, cash poor but neither want to sell property to pay tax.  I have paid mine over to HMRC in full and sister has paid her first instalment.  She wishes to pay remainder over the next 8 years.  I do not want to be held liable for this, therefore can an agreement be drawn up stating that she is liable for the remaining tax.  Solicitor is not being very helpful.  I understand that as we are both Executors we are equally responsible.  Any advice gratefully received.

Keep_pedalling

I have to say you are going about this the wrong way, you are not responsible for paying IHT the estate is. Are you and your sister executors? Are you absolutely sure there is IHT to pay when taking into account all the exemptions that can be applied (which could be up to £1M if your father was a widower)

poppystar

If the IHT forms have not been submitted how have you paid to HMRC?  If the solicitor is dealing with the estate for you I would not have expected him to instruct you to do this. As KP says it is the estate that pays the IHT not individuals. I can see why you might want to pay from your own money and not sell the property but in that case I would have thought you would have paid the funds to the solicitor. He may be struggling to be ‘helpful’ because of the way you have chosen to deal with the IHT rather than being unhelpful per se. The estate, and therefore the executors in their role, will always be liable for IHT not any individual so I doubt HMRC would assign the deferred payment to your sister alone. 

Hoenir

On what basis did the HMRC grant probate? Was the deferal an afterthought? Should have been applied for earlier.