inheritance tax

inheritance tax

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My mother is writing a  Will at the moment and we need to know if she gifts her two grandsons £100k each from her estate do the boys have to pay inheritance tax on these gifts or are they exempt if stated in the Will? 

Replies (14)

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By mrme89
30th Jul 2014 14:41

For the sums involved, do you not think it would be wiser topay for some advice rather than getting free advice from a random stranger that may or may not be correct?

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By duncanedwards
30th Jul 2014 14:59

Agree with mrme89

£80,000 tax at stake!  Get some professional advice.   There may be some subtlety about your mother's circumstances that are significant, apart from anything else.

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By J_G_W
30th Jul 2014 15:04

Possibly

If she lives for 7 years or more, no. If she dies within 7 years, yes. And its tapered, so the level of tax is reduced as the date of the gift gets further away.

Advice is recommended as there could be a number of factors within your mothers estate that could complicate matters.

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Replying to RTShort:
RLI
By lionofludesch
30th Jul 2014 15:26

Seems Unlikely

J_G_W wrote:

If she lives for 7 years or more, no. If she dies within 7 years, yes. And its tapered, so the level of tax is reduced as the date of the gift gets further away.

Advice is recommended as there could be a number of factors within your mothers estate that could complicate matters.

I infer the OP is proposing gifts on death. 

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Replying to Wilson Philips:
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By J_G_W
30th Jul 2014 15:32

My apologies

lionofludesch wrote:

J_G_W wrote:

If she lives for 7 years or more, no. If she dies within 7 years, yes. And its tapered, so the level of tax is reduced as the date of the gift gets further away.

Advice is recommended as there could be a number of factors within your mothers estate that could complicate matters.

I infer the OP is proposing gifts on death. 

Ah, sorry. Misread. In which case, its even more important to seek advice.

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RLI
By lionofludesch
30th Jul 2014 15:30

Setting that aside ....

.... the OP omitted some key facts - the value of her estate at death, to whom the other legacies are left, for instance.

There's no way you can get a sensible answer from this forum.

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By The Innkeeper
30th Jul 2014 15:31

@lionfludesch

a useful piece of data left out without which no sensible comment can be made

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By The Innkeeper
30th Jul 2014 16:28

another useful bit of data

would be what happened to the father's estate when he passed away ( assuming that he has). Is there any of his nil rate band still available

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By Justin Bryant
30th Jul 2014 17:09

Ask a lawyer

Who will tell you that unless the Will indicates an intention to the contrary, IHT is paid from the residue of the estate, after payment of debts, expenses and any specific or cash gifts. 

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Replying to matthewleitch:
RLI
By lionofludesch
31st Jul 2014 16:30

Doh

Justin Bryant wrote:

Who will tell you that unless the Will indicates an intention to the contrary, IHT is paid from the residue of the estate, after payment of debts, expenses and any specific or cash gifts. 

Doh !  Of course you're absolutely right.  I should have known that.

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By johngroganjga
30th Jul 2014 17:17

Got to the answer at last. Tax is paid from the residue of the estate, not by the recipients of specific legacies, assuming it is solvent after is has paid specific pecuniary bequests.

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Replying to Kaylee100:
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By WhichTyler
30th Jul 2014 18:50

I've always wondered...

johngroganjga wrote:
Tax is paid from the residue of the estate, not by the recipients of specific legacies, assuming it is solvent after is has paid specific pecuniary bequests.
 

What happens if the estate is not solvent after specific bequests (i.e. not enough left over to pay tax)? Is it deducted pari passu?

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By johngroganjga
30th Jul 2014 21:34

If the will does not specify (and I imagine the best written wills do) I imagine the specific bequests are all abated pro rata.

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By pawncob
31st Jul 2014 11:47

Not wasted then

So all those hours studying "Executorship Law and Accounts" weren't wasted John.

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