Inheritance Tax question

celticfc

Having read Martin's tip about inheritance tax I have a question on behalf of my Mum.

My Mum's brother died leaving everything to his mother. A solicitor was hired to deal with the estate left by my uncle, however the solicitor stole a lot of money form my uncles estate and a huge row broke out with my family trying to regain the money stolen. Before everything was sorted with my uncles estate my grandmother passed away and her will was shared between her children, 7 of them.
Now the issues with the stolen money has been sorted and the estate of my uncle is soon to be settled. My Mum has been told that she will inherit about £40,000 give or take a few pounds. She has been told that she will be liable to pay inheritance tax.
Can anyone say if she will pay IT or not?

robnye

i thought IHT is payable on the total amount if over £240k (not sure of exact figures,

try the inland revenue website

otherwise one of the cleverer finance bods might answer soon

System

Any Inheritance tax due should be deducted and paid to the Inland Revenue by the executors before the estate is split between the beneficiaries.  The Capital taxes office (Inland Revenue) usually make sure they get their money before anybody else.If the executors have told your mum she is to receive about £40,000 I would assume they have already dealt with the inheritance tax themselves as it's their responsibility. The current threshold above which Inheritance tax is due on an estate is £263,000. So any amount above that is taxable at 40%.

Robert_Sterling_3

If seven people are to get £40,000 each the estate must have been in excess of £280,000
So tax of about £1000 each from seven people should about cover it. ( Depends a bit on solicitor's fees etc so it could be higher )

widow43

Can somebody advise me as to my situation? When my husband died he put everything in trust for our children including our house. Therefore i don't actually own a house but would like to buy one abroad. I am just worried that it would not be worth it if the tax man will only make the kids sell it to pay inheritance tax?

Robert_Sterling_3

I think a husband has to make "appropriate" provision for his wife.

You do not say ( and need not say ) how much Inheritance Tax will be involved. How old your children are. How long ago your husband died.

So we are a bit in the dark when trying to give advice.

widow43

Apparently my £380,000 house should cover the bill!!!! My husband died 8 years ago and my children are now 12, 14 & 15.

Robert_Sterling_3

From available information, and I am not requesting more, I can't guess exactly what the terms of your husband's will were.  As he died eight years ago we do not know how much IT was due or how much if any has been paid, who was/were the executor(s), was a solicitor involved, what are the terms of the trust, who are the trustees, etc etc.

The children do not own the house.

Rafter

I think it all depends on the terms of the trust.

I can't see why a tax bill would suddenly crystalise because you choose to sell the house and buy abroad, as long as the trustees agree and the overseas property passes to your children eventually.

As long as you are not disbanding the trust I can't see why you couldn't do what you are suggesting - a good solicitor will probably be able to advise you better though having looked through the trust deeds.

R.

Robert_Sterling_3

The trustees might or might not be happy with the propsal to sell the house ... they must look after the children's interests.

widow43

Sorry... i should have said that i would not be selling the one i currently live in but would be buying another hoping that i could leave it to my children when i eventually die, as the one we live in here is in trust for them.