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Ask Your Own Question, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 5113
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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Hi here, Having completed probate, IHT205 and the total estate

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Hi here, Having completed probate, IHT205 and the total estate is below the £325,000 as a 20% tax payer, am I to assume any funds received as a joint beneficiary will be taxed at 40% if my total income from the estate takes my earnings beyond £40,000, if so is there a tax efficient way of dispersing the estate?
Hello and welcome to the site. Thank you for your question.

As I understand you are concerned about taxation of funds received as a joint beneficiary of an estate...

IHT if any would be payable out of the estate before distribution of funds to the beneficiaries. You would as a joint beneficiary receive the funds free of tax as the recipient of a gift.

More information on who is responsible for paying inheritance tax is covered here

Any income you derive from these funds once in your hands would be chargeable to income tax at your mariginal rate of tax but the initial capital sum would be tax free and would not be added to your earnings to calculate your income tax.

Likewise, any subsequent gain you make from investing the funds in your hands would be chargeable to CGT.

I hope this is helpful and answers your question.

If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.

Customer: replied 3 years ago.

The property we are intending to rent, but are the savings gained from the deceased taxable?

Steve, thank you for your reply.

Savings gained from the deceased are inheritance and this amount would not be taxable.
Once you reinvest these savings then all future income from it would be taxable.

I hope this is helpful.

Customer: replied 3 years ago.

So no tax liability for any savings amount? Can I therefore disperse the savings without recourse

Steve, no tax liability on the intial savings amount handed over.

Your tax liability will only arise on future income from this capital sum.

I hope this is helpful. and other Tax Specialists are ready to help you
I thank you for accepting my answer.

Best wishes.