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?
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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?
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.
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.
Seems Unlikely
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.
My apologies
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.
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.
@lionfludesch
a useful piece of data left out without which no sensible comment can be made
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
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.
Doh
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.
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.
I've always wondered...
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?
If the will does not specify (and I imagine the best written wills do) I imagine the specific bequests are all abated pro rata.
Not wasted then
So all those hours studying "Executorship Law and Accounts" weren't wasted John.