Inhertiance Tax

Inheritance tax delay

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I have a client who maybe receiving approx £40,000 from her mums estate.   There are one/two complications, her mum died in 2012, her sister was the executor of the will, sorted the Probate and has only recently informed my client of the money owed to her.

 

Where would she stand with respect to tax liabilities with inheritance tax.  Her mothers estate was declared for tax in 2012.  Will the length of time cause any difficulties?

 

Any Advice will be gratefully received. 

Replies (4)

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By pacta
25th Aug 2016 13:42

It would be unusual for your client to have any inheritance tax liability. It can depend on the exact provisions in the will, but ordinary practice is that assets are sold and the residue (what's left after paying liabilities) are split between the residuary beneficiaries; usually the kiddos or spouse.

You'll want to get a hold of the Will (or rather, your client will) and the estate papers. The executor should have informed your client of the calculation of the residue, assets, liabs, etc.

Might also wish to check for any R185's re income generated and distributed.

My expectation is that the estate has just been fudged though.

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Replying to pacta:
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By rachypachy167
26th Aug 2016 13:07

Apparently when the mum died the inheritance tax was paid the remaining monies were put in Trust. The solicitor is not very forthcoming as they state it has different capital gains tax rules.

Any ideas what the capital gains tax levels are for a Trust?

Many thanks

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By SteveHa
26th Aug 2016 13:20

Exemption for a trust is £5,550 (i.e. 50% of personal exemption)

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By pacta
26th Aug 2016 13:43

I am confused. There doesn't appear to be any gain on which CGT can bite.

You say that the estate has been liquidated and all liabilities paid. The usual implications of that are that the estate pays any CGT, which again is unusual as it first pays IHT on the estate value at death which is in turn base cost for CGT.

If the monies are in trust, who currently has them and what are the terms of the trust?

With all due respect you don't appear to have a good grasp on the facts here so you may need to refer this client on.

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