sibling dispute

[NeilOne]

Final point on this , If I understand correctly, inheritance tax is paid by the recipient of the gift , not the estate ? The allowance of 325k will be comfortably exceeded.

[Dod101]

Final point on this , If I understand correctly, inheritance tax is paid by the recipient of the gift , not the estate ? The allowance of 325k will be comfortably exceeded.

IHT is a liability of and is paid by the estate before probate is granted as I understand it.

Dod

[scrumpyjack]

Final point on this , If I understand correctly, inheritance tax is paid by the recipient of the gift , not the estate ? The allowance of 325k will be comfortably exceeded.

IHT is a liability of and is paid by the estate before probate is granted as I understand it.

Dod

The liability for IHT on gifts < 7 years before death, in theory at least, falls on the recipient of the gift, unless the gift was expressly made free of IHT. But, as you say, IHT must be paid in full (except in respect of property) before probate is granted. Of course the simple solution, if the recipient is also a beneficiary of the estate, is that the executor could deduct the IHT on the gift from the beneficiary's share of the estate.

One can see a whole new line of family argument exploding over this!

[Dod101]

Final point on this , If I understand correctly, inheritance tax is paid by the recipient of the gift , not the estate ? The allowance of 325k will be comfortably exceeded.

IHT is a liability of and is paid by the estate before probate is granted as I understand it.

Dod

The liability for IHT on gifts < 7 years before death, in theory at least, falls on the recipient of the gift, unless the gift was expressly made free of IHT. But, as you say, IHT must be paid in full (except in respect of property) before probate is granted. Of course the simple solution, if the recipient is also a beneficiary of the estate, is that the executor could deduct the IHT on the gift from the beneficiary's share of the estate.

One can see a whole new line of family argument exploding over this!

NeilOne did mention a gift so I guess he needs both pieces of information as a gift could be during the lifetime of the donor or it may refer to a gift by way of the Will.

Dod

[NeilOne]

https://www.gov.uk/inheritance-tax/gifts

How Inheritance Tax on a gift is paid
Any Inheritance Tax due on gifts is usually paid by the estate, unless you give away more than £325,000 in gifts in the 7 years before your death. Once you’ve given away more than £325,000, anyone who gets a gift from you in those 7 years will have to pay Inheritance Tax on their gift.

Seems to imply that if more than 325k is gifted with 7 years (true in this case) then the recipient pays according to the size of gift. If the recipients all have the same liability then probably doesn't matter. Though the tax would be due well before the estate is settled.

In theory I suppose HMRC would perhaps not know about the diamods , unless there was an informant !

[Mike88]

How can there be a liability relating to a gift that was given on an unknown date? It could have been in excess of 7 years. Who knows? If the jewelry was taken, again the theft cannot be proven, if the mother has a fading memory. I would leave well alone and not raise this issue at all as it could give rise to difficulties when the inevitable happens.

[Dod101]

How can there be a liability relating to a gift that was given on an unknown date? It could have been in excess of 7 years. Who knows? If the jewelry was taken, again the theft cannot be proven, if the mother has a fading memory. I would leave well alone and not raise this issue at all as it could give rise to difficulties when the inevitable happens.

And I suspect that that is what happens in the majority of cases.

Dod

[scrumpyjack]

How can there be a liability relating to a gift that was given on an unknown date? It could have been in excess of 7 years. Who knows? If the jewelry was taken, again the theft cannot be proven, if the mother has a fading memory. I would leave well alone and not raise this issue at all as it could give rise to difficulties when the inevitable happens.

And I suspect that that is what happens in the majority of cases.

Dod

I have heard of cases where such shenanigans have been taken much further, eg the family home furnished with valuable antiques and paintings etc., where the children stripped it all out, refurnished it with Ikea stuff and then called in the valuer for probate valuation!