Inheritance Tax will hit- what happens ??

I am very sorry for your loss.

It is for your executors to sort out the property and IHT. They are also responsible for paying the instalments as they fall due although they can choose not to and pay the interest later on. This all comes out of the estate and executors are unlikely to want to use their own money to pay this up front themselves. If there is any realisable cash, then obviously that can go towards paying the liabilities initially. Everything your father owned forms part of his estate and is therefore calculable for IHT. I am sure though that they cannot touch the account that is also in your name although if there is a paper trail of money into that account questions might be asked. The issue of whether any of that money could be construed as a gift and therefore forming part of the estate will have to be investigated. The executors have forms they need to complete for Inland Revenue. IR (or more correctly HMRC as they are now) will not come round to your parent's house and search through everything. It is up to the executors to log the possessions and they who pay the penalties if they do it incorrectly. They may well want to check through everything. Who has been appointed in the Will? As the death has now occurred, I should think there is little you can do to reduce the IHT liability which falls solely to the estate, not the beneficiaries.

molotov wrote:

The executors will need to pay any tax bill before they cen get a grant, which gives them the power to deal with your father's estate, so this will be one of the first things they will do. HTH

The law has changed on this matter.
Banks and Building Societies can release money to pay the IHT.

"have executors of my parents Wills, but can anyone advise me:"

who is the executor? family? solicitor?

"1) How can I save as much as possible from this Death tax?"

bit late now! various things could have been done prior to death but from now on the only way to dodge anything is illegally.

"2) Do I have to declare absolutely everything?"

are you the executor? whoever is the executor needs to declare the LOT.

"3) What about joint bank account in my father's and my name?"

well thats half yours and half his...UNLESS its a bit more fishy than that - was it his money and only put in joint names in recent years? if so then its pretty much all his in the eyes of the IR.

"4) When and how will the Inland Revenue get in touch?"

the executors contact them

"5) How deep will the Inland Revenue probe, and for how long until they'll leave me alone?"

just like any self assesment...they will review the returns the executors make and see if they want further details. a lot will depend on the size and complexity of the esate. If its a house a 3 peps its all pretty simple....if its 5 houses and a collection of art they may feel theres some milage in re-valuing various items.

"6) Will they come round to my parent's house and search through every last bit of paper, bills, bank details, make notes of anything of value, etc?"

it is a criminal offence for an axecutor to provide false info....so they should regard the above as quite possible (even if its not)....if the executor gives ALL the deatils there will be nothing to go wrong.

as for probate....tax needs paying then probate granted and assets can be released.....SOME providers MAY release funds sooner but up to them....not a big deal though, plenty of ways to pay the tax with loans etc.

molotov wrote:

Some tax planning can be doen in the first two years after death, though the executors would need to get some specialist advice on this

what tax planning could be done to lower IHT other than alter the Will to leave money to charity?????