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Is This Winter Fuel Allowance IHT Liable on Death?

Winter Fuel Allowance Paid Into Bank Account 3 1/2 Months After Death - Is It An Asset For IHT400?

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Client died September 2017. He died while living at home. His executors' estate Bank account received the £300 Winter Fuel Allowance around 3 1/2 months after death. It appears Benefits Agency knew about the death immediately, but they still paid the amount out, and have never requested it back.

Client appears to have died before the ice cold winter weather set in, so it would be hard to imagine that on the day of death the executors were in any expectation of the £300 Allowance.

I know there is some sort of formula in connection with low temperature over a period of time. But it does look like the £300 helped to keep the deceased's empty house warm rather than keeping the individual warm.

Is the £300 to be regarded as an asset at death, or is it an item of estate administration tax free "bounty".

I have put it on the corrective IHT account to be on the safe side, but I have my doubts.

 

 

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By Accountant A
03rd Oct 2019 18:51

I believe that the WFA is given as of right whereas the Cold Weather payment is triggered by the temperature being below certain levels.

On that basis, I would say any WFA was an asset of the individual.

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Replying to Accountant A:
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By Tax Dragon
03rd Oct 2019 22:51

Accountant A wrote:

I would say any WFA was an asset of the individual.

I don't know enough to argue, and for (I guess) somewhere between £108 and £180 in tax I wouldn't argue that much even if I did. But I do wonder how much that (presumed) asset was worth in September, especially if there's a general expectation that the asset would expire with the (previous) owner. (And surely the payment on this occasion was an aberration... assuming as asserted that the payer knew it was paying an estate.)

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Replying to Tax Dragon:
By penelope pitstop
04th Oct 2019 00:33

Thanks for the above two responses. I am going to put it in as an estate asset at death.

It would take too much time and trouble for me to do the research as to whether or not there was an entitlement at death. I suspect that with death occurring September there was no entitlement to the Allowance on the day of death. But somehow the payment has been made, and now two years after death there has been no attempt to recoup it.

I do suspect it is in reality "bounty" in the hands of the executors. But in the interest of fairness I will ensure it is subject to 40% IHT.

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By PhilJ109
04th Oct 2019 12:42

I understand the qualifying date is sometime in September so if the birthday is a day after that qualification does not apply till the following year. As such there are losers and gainers?

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Replying to PhilJ109:
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By Tax Dragon
04th Oct 2019 12:47
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Replying to PhilJ109:
By penelope pitstop
04th Oct 2019 13:00

Thanks.
Client was well over 90 years' old.

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