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Sam
Sam, Accountant
Category: Tax
Satisfied Customers: 16546
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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Will donatio mortis causa be subject to inheritance tax? I

Customer Question

Will donatio mortis causa be subject to inheritance tax? I know it doesnt vest in the executors and it goes straight to the donee on the death of the doner. But could or would donatio mortis causa gift benefit from the nil rate band?
JA: Where is this? It matters because laws vary by location.
Customer: England uk
JA: What steps have been taken so far?
Customer: None
JA: Is there anything else the Lawyer should know before I connect you? Rest assured that they'll be able to help you.
Customer: No
Submitted: 10 days ago.
Category: Tax
Customer: replied 10 days ago.
if apart from the donatio mortis causa gift there is a will which deals with other assets, how the nill rate band applies to both?
Expert:  Virtual-mod replied 9 days ago.
Hello,

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Customer: replied 9 days ago.
I'm ok with continuing
Expert:  Sam replied 9 days ago.

Hi

Its included as part of the estate for consideration for Inheritance tax so the donatio mortis causa gift should be included within the will anyway

HMRC state

IHTM14900 - Lifetime transfers: investigation issues: donatio mortis causa (DMC) A DMC is a gift of property made by a donor in contemplation of their death within the near future. ... A DMC is in effect an incomplete gift for Inheritance Tax purposes in that the property gifted remains part of the estate at death.

Thanks

Sam

Customer: replied 9 days ago.
then together with the rest of the estate will be subject to Nill rate band? How will the £325000exemption under the nill rate band apply to the DMC and the rest of the estate say for instance DMC is worth £212000 and the estate £300000?
Expert:  Sam replied 9 days ago.

Hi

in the usal way to estate is added togather the first £325000 of the estate and first £175000 of primary resdience are exempt then the rest is subject to 40% tax

Thanks

Sam

Customer: replied 9 days ago.
the dmc will not have priority as in using the Nill rate band first and then the rest being used for the rest of the estate? Thank you
Expert:  Sam replied 9 days ago.

Hi

In this instance yes

Thanks

Sam

Customer: replied 9 days ago.
basically nothing to pay for the dmc and the remaining of the nil rate band will be used for the rest of the estate? Thank you
Expert:  Sam replied 9 days ago.

Hi

Yes as already stated - but your solicitor can clarify all of this which would would need to ensure the DMC is applied correctly and overseen correctly

Thanks

Sam

Customer: replied 9 days ago.
Thank you
Expert:  Sam replied 9 days ago.

Hi

Yu are very welcome

Thanks

Sam