Inheritance Tax and stuff

critchley

My Partner died very recently before he received an inheritance from his brother of approximately £50,000.  He willed all his money and assets to me.  The Solicitors dealing with his brother's estate have asked me for the death certificate, a copy of the will and my bank details.  Will I have to include this money when sorting out my Inheritance Tax liability or will it just be classed as mine as it's in my account?  I think in my heart it will still be classed as part of his assets but with this timeline I can hope.

Flugelhorn

did your partner die after his brother? if so then the money would be part of your partner's estate

Marcon

critchley said:

My Partner died very recently before he received an inheritance from his brother of approximately £50,000.  He willed all his money and assets to me.  The Solicitors dealing with his brother's estate have asked me for the death certificate, a copy of the will and my bank details.  Will I have to include this money when sorting out my Inheritance Tax liability or will it just be classed as mine as it's in my account?  I think in my heart it will still be classed as part of his assets but with this timeline I can hope.

If your partner's brother predeceased him (which I think is the case), then the £50K inheritance left to your partner forms part of your partner's estate unless there was a clause in the brother's will (highly unlikely, I'm afraid) stating that it would pass directly to you if your partner didn't survive to receive actual payment.

If you were married, then there is no IHT between spouses. If you weren't married, and your partner's estate is over the £325K threshold, then the estate will need to pay IHT. The fact the money is now in your account doesn't alter that.

Condolences, and I'm sorry you are having to deal with this on top of your recent loss.

squirrelpie

I think this question is in the wrong place?

Keep_pedalling

squirrelpie said:

I think this question is in high the wrong place?

It is, I have asked for it to be moved to deaths funerals and probate.

Keep_pedalling

What is the total value of your partner's estate? IHT will only be payable if it exceeds £325k and you were not married or in a civil partnership.(including the inheritance from his brother). 

Albermarle

Will I have to include this money when sorting out my Inheritance Tax liability or will it just be classed as mine as it's in my account?

You will not have a IHT liability, his estate might.  I know he has left everything to you, but that is the correct way to look at it.
Normally as well the executor of his will ( who is that, you ?) would have a separate bank account to handle the affairs of the estate. Then the £50K would be paid into that initially, and be part of any calculations about IHT liability.
It ideally should not be paid to you directly at this stage.

Brie

moved to the correct board

critchley

Thanks for your replies.  I have worked out that with the half share of our flat which we own as joint tenants and the addition of a smaller flat which we own (beneath ours and where my grandson lives) plus the £50K inheritance I will be about £63,000 over the £325K threshold.  That means that at the age of 80, not only have I not benefitted from what my partner tried to leave me but I shall be approximately £25,000 in debt and it appears that I will have to get a loan at my age to pay it off.  What with the stress of losing my partner and my own health problems I have a very miserable few years left struggling on income support.  I might as well not be here.  Surely this can't be fair.  The stress of it is making me even more ill than I am.

All this because we didn't know that if we had just married or had a civil partnership I could have had an extra £325,000 tax relief.  How can this be right or fair?

Flugelhorn

critchley said:

All this because we didn't know that if we had just married or had a civil partnership I could have had an extra £325,000 tax relief.  How can this be right or fair?

I am really sorry that you didn't know this but it is one of the few remaining advantages of being married / in a civil partnership.  I suppose it is the way that state validates the partnership - tricky to do otherwise

bobster2

critchley said:

Thanks for your replies.  I have worked out that with the half share of our flat which we own as joint tenants and the addition of a smaller flat which we own (beneath ours and where my grandson lives) plus the £50K inheritance I will be about £63,000 over the £325K threshold.  That means that at the age of 80, not only have I not benefitted from what my partner tried to leave me but I shall be approximately £25,000 in debt and it appears that I will have to get a loan at my age to pay it off.  What with the stress of losing my partner and my own health problems I have a very miserable few years left struggling on income support.  I might as well not be here.  Surely this can't be fair.  The stress of it is making me even more ill than I am.

All this because we didn't know that if we had just married or had a civil partnership I could have had an extra £325,000 tax relief.  How can this be right or fair?

Surely the £50,000 will cover the IHT? The executors of your partner's brother's estate should pay that to you as executor of your partner's estate. And you pay the £25,000 IHT bill using that?