Inheritence Tax Query

[Ecosseven]

Morning all,

My Uncle passed away in January this year and was kind enough leave me around £10k in his Will. Will this be taxed as additional income? I believe the total value of his estate, including his house, may be over the Inheritance Tax threshold.

Thanks in advance.

[Eric Mc]

Taxed on whom?

Normally, you wouldn't be taxed on this. Any IHT due will be paid out of your uncle's estate - usually by the executor.

[Ecosseven]

Thanks Eric. I had assumed that any part of my late Uncle's estate bequeathed to me would only be released once HMRC had received the tax due. Assuming that the estate would only be taxed once, and even then only if the value was above the IHT threshold, my thinking was that I wouldn't be taxed on the £10k left to me. Is this correct?

[Eric Mc]

Normally, that is how it works. You don't normally have any liability to tax on money you have received as an inheritance.

If HMRC later finds that an inheritance has been distributed without the IHT being administered or deducted properly, they CAN pursue the recipients for unpaid tax.

[nitrodave]

What is the value of the total estate and who is the executor?

The tax should be paid by the executor before the assets are distributed and then you will get your £10k after that and not have to pay tax on it.