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Harris
Harris, Family Law Expert
Category: Family Law
Satisfied Customers: 2848
Experience:  Family Law - Specialist in Divorce, Financial Relief and Children Matters
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I am looking opinion on a will and its interpretation

Customer Question

I am looking for an opinion on a will and its interpretation of payment of IHT, The will is currently going through probate, but I have been given a copy of it by the executor.I think it may be difficult to give an opinion without seeing the full will, however, my question is relates to whether I have to pay IHT on my portion of the estate or whether the remainder of the estate covers the whole IHT liability - it is not clear to me from the document.
Submitted: 1 year ago.
Category: Family Law
Expert:  Harris replied 1 year ago.
Hi, thank you for your question. It is for the executor to use funds from the estate to meet the IHT bill, not you. However, if you had received gifts in the 7 years prior to the deceased's death, then it is you that is to meet the IHT liability in relation to that gift .If you found my information provided helpful please could you rate my response positively as I will not be credited for my response without a positive rating.
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Customer: replied 1 year ago.
Let's say that Paragraph 4 adds up to £1m - does this mean that the beneficiaries named in Para 4 will get £1m gross (no IHT deducted) and the IHT liability will be paid by the beneficiary of Para 5?BTW there were no gifts prior to death.Thanks
Expert:  Harris replied 1 year ago.
It will be for the executors to decide how to meet the IHT bill once they have reported it to HMRC. If the estate is tied up in property then the executors can elect to pay the IHT in monthly instalments over 10 years.
Customer: replied 1 year ago.
I am not so much interested as to when the executors pay the IHT or how, what I am trying to discern is whether Para 5 states that *all* IHT liabilities will be paid by the proportion of estate left after the beneficiaries of Para 4 - let's assume no Nil Rate allowance or spouse transfer - if Para 4 is worth £1m then IHT @ 40% = £400k. What I am asking is whether this £400k will come out of the monies of Para 4 beneficiaries or the beneficiary of Para 5?
Expert:  Harris replied 1 year ago.
Could you type out exactly what it says in relation to those paragraphs and what the total estate is?
Customer: replied 1 year ago.
Ok. Para 4 states that 2 portfolios (val £1m) and 2 pieces of land (val. £20k) are to be split between myself, my brother and my nephew. The paragraph also states:'...to my Trustees upon trust but subject to the payment of a rateable proportion
of the Inheritance Tax payable on my death in respect thereof...'.Para 5 covers the remaining value of the estate (approx £3m). In Para 5 it states:'...I GIVE all my real and the remainder of my personal property whatsoever and
wheresoever (including any property over which I may have a general power of
appointment or disposition by Will) to my Trustees upon trust for the payment
thereout of my debts and funeral and testamentary expenses legacies and all
Inheritance Tax and other fiscal impositions payable in respect of my estate and
subject there...'.My question is whether the statement in Para 5 :'....and all Inheritance Tax and other fiscal impositions payable in respect of my estate...'means that the total IHT bill for the estate will come out of the £3m and thus myself, brother and nephew will receive the £1m from Para 4 gross i.e. £1m and not £1m-40% IHT ???Thanks
Expert:  Harris replied 1 year ago.
Thank you. It is a bit confusing as paragraph 4 states that there is to be payment of rateable proportion of IHT which would indicate that paragraph 4 will be subject to a proportion of IHT and that the "remainder" would be for paragraph 5.It would therefore be assumed that paragraph 4 would be subject to 25% of the tax burden and paragraph 5 for 75% of the tax burden in accordance with the size of the estate being distributed. Have you discussed this with the executor?