My beloved uncle died and me and my five siblings are the benificiaries of his will. His London bungalow is worth well over the inheritance tax threshold of 300,000 pounds, but certainly not if you split it six ways. So do you have to pay inheritance tax on the value of the estate or on the amount which each individual eneficiary receives?
2007-10-22 11:02:41 · 5 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ United Kingdom
The Executors pay any Tax due out of the 'net' estate (i.e if the estate exceeds the threshold after paying off all debts, mortgage etc).
If there is not enough cash in the Estate to pay the Tax, the Executors will have to sell assets (usually, the house).
Whats left over is then distributed according to the will, and so the Beneficiaries will have no Tax to pay (and often no house either).
2007-10-22 11:05:50 · answer #1 · answered by Steve B 7 · 1⤊ 0⤋
Inheritance tax is levied on the Estate but if a beneficiary receives a value in specie, i.e. a specific bequest from which cash cannot be withheld e.g. a house, then that beneficiary would have to pay the appropriate amount himself if he wished to retain that asset intact..
2007-10-22 11:44:18 · answer #2 · answered by Eddie D 6 · 0⤊ 0⤋
Value of the estate miladdo.
Taxman don't care how many beneficiaries there are.... he just wan't his taste on what comes over the threshold.
Also he'll want paying before you can do anything else... by law. You might have to get a bank loan in order to pay him, before you can get anything done with the administration of the estate. Your hands are tied until HM Inland Revenue (Estates Division) gets it's cut.
2007-10-22 11:11:39 · answer #3 · answered by Narky 5 · 0⤊ 0⤋
All the estate is added up....all the debts paid off...then the tax man takes his 40% before the remainder is split between the benfactories
2007-10-22 14:50:57 · answer #4 · answered by stormydays 5 · 1⤊ 0⤋
I disagree with SteveB, but I may be wrong. I understood that the estate was divided and tax levied accordingly. Obviously it depends on the wording of your Uncles will, but I understood that tax is payable on the inheritance of the individual not the estate. However, I stand to be corrected and I look forward to hearing if I am wrong, I can then advise my parents their solicitor was wrong.
2007-10-22 11:13:58 · answer #5 · answered by translatorinspain 4 · 0⤊ 1⤋