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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4338
Experience:  FCCA FCMA CGMA ACIS
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My father in his will left his ‘nil band rate' to me in a trust,

Customer Question

My father in his will left his ‘nil band rate’ to me in a trust, I lent it to my mother until her death. No funds were transferred to my name - she received all the income and paid tax on it during her life time. On my mother’s death when completing the IHT400 form we were allowed to put the value of this ‘nil band rate’ PLUS a retail price indexing. The Inheritance tax process has been signed off by the inheritance tax office.
My question
Is the value [ ‘nil band rate’ PLUS a retail price indexing MINUS ‘nil band rate’] i.e. the value of the retail price indexing incur any other form of tax such as Capital Gains Tax or Income tax ?
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.

Hello, I am Keith, one of the experts on Just Answer, and happy to help you with your question.

What is the exact nature of the trust created by your Father's will and when does it terminate?

Once I know this we can move ahead with solving your conundrum.

Customer: replied 2 years ago.

The trust terminated upon my mother's death. This exact nature question I find difficult to answer - sorry. I know it was not an absolute or discretionary trust.

All I know is there was never any of her investments transferred to my name.

Expert:  bigduckontax replied 2 years ago.

Presumably though, on her demise you inherited the residue. As the IHT Office have signed off the account the moneys come to you free of tax. The value of the funds inheroited is irrelevant. The only tax you might incur is if you invest thse funds. Then any income or capital gains will be on your Income and Capital Gains Tax computations.

I do hope that I have shed some light on your position.

bigduckontax and other Tax Specialists are ready to help you
Customer: replied 2 years ago.

Yes - on her death I inherited the residue.

Thank you for your help.

Expert:  bigduckontax replied 2 years ago.

Delighted to have been of assistance.

Please be so kind as to rate me before you leave the Just Answer site.

Expert:  bigduckontax replied 2 years ago.
Thank you for your support.