Inheritance Tax

Have a look at

and IHT14 in particular.

The beneficiary doesn't pay the tax, the estate does. The difference could be critical to the way the estate is distributed.

I realise that this could still give you the same problem, hopefully the other response answers it.

tim

It seems this old conundrum has been (at least partially) addressed.

My understanding of what happens:

When dealing with someone's estate after death, there's been an age-old problem. On death, the deceased's assets (e.g. bank accounts) are frozen. Inheritance tax has to be paid before the accounts can be unfrozen. However, the executors often need to get at the money in the accounts to pay the inheritance tax. Catch-22.

It seems the Inland Revenue have finally woken up to this conundrum and have allowed money to be paid direct to the Inland Revenue from the frozen accounts (similar to paying for e.g. funeral expenses). The necessary form is called a D20 and is available on the Revenue's website.

There was an article in the Times about this a little while ago:

especially the bit about the D20 See also: (Inland Revenue IHT Newsletter April 2003) HTH (& it seems someone misinformed you)

Allan

In message , Kris writes

The others who have replied are correct, however if the deceased gave any dosh away in the 7 years before the death and they exceed the threshold for IHT then the beneficiaries of those gifts over the threshold would have some tax to pay themselves.,

Thank you very much Allan and others.

I didn't know about D20, I expect this form will gain increasing popularity in the future unless the IT threshold rises.

It appears the insurance companies are targeting older people to take out insurance to cover IT payment. Probably another unnecessary rip-off.

Chris

In message , Kris writes

Not the Insurance Companies per se but, many so called 'IFAs' seem to present this as the only solution, whereas it should only be used after all other avenues have been utilised in order to miti8gate the liability. None the less, it very often isnt possible to completely mitigate the liability and then a Whole of Life policy is useful so long as the lives assured can afford the premium and if their health isnt a problem for underwriting.

Happy to help.