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Sam, Accountant
Category: Tax
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Are bequests subject to tax in uk? Are bequests by a uk citizen/resident

Customer Question

Are bequests subject to tax in uk? Are bequests by a uk citizen/resident to US citizens/residents subject to tax in US?
Submitted: 3 years ago.
Category: Tax
Expert:  Sam replied 3 years ago.




Thanks for your question, I am Sam and I am one of the UK tax experts here on Just Answer.



As we are the UK tax forum, we can answer the UK tax aspect but not the USA one, would you like to proceed?





Customer: replied 3 years ago.

yes, proceed.

Expert:  Sam replied 3 years ago.
Hi Roger

Thanks for your response

If the UK residents has died and their estate is more than £325,000 - then Inheritance tax is considered of any amount over the £325,000 threshold. This is paid from the estate, so can sometimes mean an asset has to be sold to make good that amount, which can fall onto the recipients from the estate to make good the tax due.
But this is handled by the person appointed as executor of the will, which is normally a relative or close friend.,

If its a bequest made whilst the individual is still alive, then there is no tax due, however, for the Inheritance tax consideration (when the individual passes away) as long as the individual lives for more than 7 years, at which point it is no longer considered for Inheritance tax.
If they do not survive more than 7 years, then one again, if the estate (including any gifts) is more than £325,000 then there is Inheritance tax to consider, and if there are insufficient funds in the estate then it may be an asset bequeathed has to be sold by one of the recipients to make good the Inheritance tax due.

Perhaps if you could advise the specific position you find yourself in, I can offer amore concise response.