Is IHT due on assets - debt claim exceeds assets?

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Hello

After some general information on the following scenario.

Folowing the death of an individual a claim is lodged against both the personal & business assets of the individual. This Claim exceeds the combined assets of both the combined personal and business assets. A court judgement awards the entire estate to the Claimant.

My question is this. Is there any IHT payment due on the estate as basically there are no remaining assets, these having been awarded in total to the Claimant?

Any reference to HMRC documentation that i could use as a reference would be appreciated, as i need to present this to the Executors/Solicitors involved in the estate administration.

Regards

 

Replies (15)

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By Tax Dragon
15th Jan 2021 12:58

DoV to a surviving spouse?

Too late?

I'm not aware of any tax rule that treats this situation differently from any other. Your issue may be that the claim did not commence until after death, so is there a 'debt' at all at that point? Is that the correct question for you to be asking? What have the solicitors said?

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paddle steamer
By DJKL
15th Jan 2021 12:59

In effect is there an estate liability that reduces the chargeable estate.

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By Tax Dragon
15th Jan 2021 13:10

Does it matter anyway. If there's no money, what is HMRC going to collect?

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By Tax Dragon
15th Jan 2021 13:10

Does it matter anyway. If there's no money, what is HMRC going to collect?

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Replying to Tax Dragon:
paddle steamer
By DJKL
15th Jan 2021 13:19

Would any prior lifetime gifts possibly have an impact on recoverability?

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Replying to DJKL:
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By Tax Dragon
15th Jan 2021 15:37

Ever get the feeling there's something you're not being told?

And who's paying the fees, one wonders.

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Replying to Tax Dragon:
paddle steamer
By DJKL
15th Jan 2021 17:03

A bit more information as to this claim, why was it made, what happened and when, certainly relative to the date of death, when legal action started etc would have been of interest. I think there is something about executors publishing a public notice with creditors then having a period to lodge claims but really not my forte.

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Replying to DJKL:
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By Tax Dragon
15th Jan 2021 18:11

Creditors implies (extant) debts.

All we're told is there's a claim post mortem. Could be anything.

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Replying to Tax Dragon:
paddle steamer
By DJKL
15th Jan 2021 19:34

Presumably the event giving rise to the claim happened pre death, or is that a presumption too far?

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By Paul Crowley
15th Jan 2021 13:30

IHT is the problem of the solicitors, estate, executors
Why are you involved?

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By bernard michael
16th Jan 2021 09:32

Could a deed of variation work or is it too late ???

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Replying to bernard michael:
paddle steamer
By DJKL
16th Jan 2021 13:55

If it is a liability it is a liability surely taking precedence over any distribution from the estate, how does a D of V help, there is either something to distribute or there is nothing.

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Replying to DJKL:
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By Tax Dragon
16th Jan 2021 14:26

But if the claim reduces the distributable assets but not the tax (the OP), then an idea to reduce the tax (if relevant, since as I said, does it actually matter?) might be a DoV to surviving spouse/charity/etc (sadly I don't think UKIP works, else that would be a vaguely humourous option).

That was the first point in the first reply, btw.

Also btw, this OP has posted questions but never commented on any thread (including those s/he initiated). So were just talking among ourselves. I'll see you guys on other threads. I'm outta this one.

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Replying to Tax Dragon:
paddle steamer
By DJKL
16th Jan 2021 17:38

See you on the darkside

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Replying to DJKL:
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By bernard michael
18th Jan 2021 09:20

DJKL wrote:

If it is a liability it is a liability surely taking precedence over any distribution from the estate, how does a D of V help, there is either something to distribute or there is nothing.

I was commenting on the basis that we seldom get the full picture from an OP eg the details of the judgement, the estate assets and the beneficiaries

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