House Clearance Help & Advice: Paying inheritance tax if you are
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If you have been listed as the executor of the deceaseds estate
then you may have to pay inheritance tax, whether or not you do will depend
on several factors.
How much the estate of the deceased is worth, including their belongings?
If the person benefited from any trust then how much the trust was worth.
The total value of certain gifts that the deceased made up to seven years
before they passed away.
If all the above add up to over a certain amount then this is called a
nil rate band then the estate is liable to pay an inheritance
tax of 40% of the total above this amount. Currently for the year 2007/2008
the value of this is £300,000.
When it comes to the gifts that the deceased received in the 7 year period
then not all gifts, only certain ones are included when working out the
calculations for the inheritance tax. Any gifts which were given by husband
and wife are exempt form the tax as are gifts which have been given in
same sex marriages providing it is a registered civil partnership. There
are ways that other ways that a gift can be made exempt from inheritance
tax and these include:
A single gift of £3,000 every year.
Small gifts that are under £250 each.
Any gifts that are made under the name of a charity or in the name of
a political party.
If you give a child the gift of £5,000 as a wedding gift.
Any gift that is classed as normal expenditure, normal expenditure is
classed as a gift that would not reduce your standard of living.
Inheritance tax can be very expensive so it is in your best interests
to seek legal advice from a solicitor about what can and cant be
classed as exempt. Any legal advice that you have to take as executor
of the estate can be paid through the estate, it is essential that you
get advice because if you pay the wrong amount and there is outstanding
tax then you might have to pay for this out of your own pocket, if you
failed to get correct legal advice.
If you have been named as the executor of the estate then it is your legal
responsibility to pay the inheritance tax, the tax under normal circumstances
will have to be paid within a 6 month period of the person passing away.
Before you can obtain probate or letters of administration then you will
have had to pay some or all of the inheritance tax.
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us via e-mail.
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