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bigduckontax, Accountant
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Question on Inheritance Tax: Can Inheritance Tax be

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Question on Inheritance Tax: Can Inheritance Tax be proportioned and paid by individual beneficiaries based upon the value of the inheritance each receive? Scenario; An estate that comprises of 3 properties, each with a probate valuation of 500K each plus other assets with a value of 500K (estate total value 2m) - 3 siblings. The Will states that 2 of the siblings are to receive x1 property each and the remainder of the estate (the remaining x1 property and 500K in other assets) are to be divided equally between the 3 siblings. Given that 2 of the siblings will have received a larger portion of the estate will they be liable for a larger portion of the inheritance tax bill OR, is the estate valued in total, tax deducted on the whole amount and then assets distributed thereafter? The concern is that the 3rd sibling who will be receiving less of the estate than the other 2 will end up paying a third of the IHT bill on the 2 properties they are not benefiting from.

Hello, I am one of the experts on Just Anwer and pleased to be able to help you with your question.

This is a commonly held misconception. Beneficiaries are not liable for Inheritance Tax (IHT). When a person passes on their estate is managed by Executors and they are responsible for paying IHT, if any. If the estate is inadequate to meet the IHT bill then it is the Treasury who are the losers. Thereafter, the remaining funds are distributed according to the deceased's will.

I do hope that I have been able to clear the air for you in this matter.

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