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Carers UK Forum • Inheritance Tax Liability
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Inheritance Tax Liability

Posted: Fri Jul 23, 2021 9:57 pm
by Wendy2020
My father has not passed yet, but I am worried about discussing this with him.

Re: Inheritance Tax Liability - Beneficiary of a Trust Will

Posted: Sat Jul 24, 2021 8:22 am
by bowlingbun
Stop trying to save money by not going to a solicitor. Let them sort it out for you. Where is mum?
I ask because I'm widowed. I "inherit" my husband's Inheritance Tax Allowance. If the Trust own the house, I'm not sure if their legal status is that of landlord, which brings obligations of property maintenance.

Re: Inheritance Tax Liability - Beneficiary of a Trust Will

Posted: Sun Jul 25, 2021 10:06 pm
by Wendy2020
Thanks BB, I wish it was that simple. (Hiring a solicitor.)

Re: Inheritance Tax Liability - Beneficiary of a Trust Will

Posted: Sun Jul 25, 2021 10:22 pm
by bowlingbun
That is a terrible mess to unravel. I know several people left with nothing after a second marriage. However some fool solicitor set this up, is he/she still practising?! Presumably second wife is younger fit and healthy? If she died first he could use her share of his IHT exemptions, but as a trust is involved I really don't know enough to help.

Re: Inheritance Tax Liability - Beneficiary of a Trust Will

Posted: Mon Jul 26, 2021 5:10 pm
by William_21071
Hi Wendy,

I work in this area but obviously cannot advise you in a professional capacity on this. However, a few things that I would say which hopefully you find helpful are as follows:
  • I am not quite sure what you meant by the comment "In fact I will be taking a largish loss if the advice I have been given is correct". In case you meant that as an executor you might have to top the estate up from your personal funds if the liabilities are higher than the assets I wanted to assure you that the Estate is a separate legal body to you - which you administer... if the estate can't pay its liabilities its the creditors that go short, you do not personally contribute (although you would not gain anything as a beneficiary unfortunately).

    Your advice that it is not worth the cost of litigation to argue over contributions to the house upkeep, are almost certainly correct, litigation costs build up very quickly and the only winners from this would be both sides lawyers.

    £12,000 seems a very high estimate for the proper provisional advice you need upfront. My advice would be to find a "CTA" (Chartered Tax Adviser) who specializes in Estates to talk to. On the whole solicitors are not very good with tax (even probate ones) it is a complex area and requires a head for figures. However, you may find a CTA qualified solicitor (as likely to work at an accountancy as a law firm) who might fit the bill perfectly for the advice you are after. Because lawyers / CTAs charge in time, it I usually better to find the expert and get advice more quickly than it is to pay someone with moderate knowledge to research and cast around to find answers. In terms of people that would fit the bill I would google: "Chartered Tax Adviser probate IHT Trusts" to get a decent list of results of people best placed to help on the non-litigious side. This may be a much more cost effective way of getting a steer on the most pressing matters arising on the trust IHT.
All the best!

Re: Inheritance Tax Liability - Beneficiary of a Trust Will

Posted: Mon Jul 26, 2021 5:14 pm
by William_21071
On your last point:

"I just have very little faith in the solicitors as I feel they did not advise my father fully at the time and he/I will pay the price."

If this transpires to be the case talk to a solicitor specialising is solicitor professional indemnity claims. If the advice is defective and has caused you loss solicitors must have insurance in place to cover this. The time limit for a claim should start from when it became known the advice was inadequate.

Re: Inheritance Tax Liability - Beneficiary of a Trust Will

Posted: Fri Jul 30, 2021 11:02 pm
by Wendy2020
Thanks William.