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Wills - Please Help.
Are national saving certificates and ISAs hit by Inheritance tax when someone dies.
Many thanks in advance
Mitchell.
Many thanks in advance
Mitchell.
Answers
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Inheritance Tax is based upon the TOTAL value of the estate. So EVERYTHING is added up, including the value of properties, bank savings, shares, National Savings certificates, ISAs, cars, jewellery, furniture, etc, etc.
If that total comes to over £325,000, Inheritance Tax is charged at 40% (or possibly at 36% where there's a charitable donation) on the excess. If the estate is left by a person who has previously inherited from their spouse or civil partner, the exemption can be doubled to £650,000 because the spouse's/partner's exemption is also inherited.
If the TOTAL value of the estate comes to less than £325,000 (or £650,000, as appropriate), no Inheritance Tax is payable.
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If that total comes to over £325,000, Inheritance Tax is charged at 40% (or possibly at 36% where there's a charitable donation) on the excess. If the estate is left by a person who has previously inherited from their spouse or civil partner, the exemption can be doubled to £650,000 because the spouse's/partner's exemption is also inherited.
If the TOTAL value of the estate comes to less than £325,000 (or £650,000, as appropriate), no Inheritance Tax is payable.
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Thanks for that guys, you've been great yet again. Just 2 more questions....
1) Does one need to tell solicitor how much there is in each bank, ISAs etc etc?
2) And after the death WHO calculates the final amount to be paid in Inheritance Tax? Is the executor able to do it or does it have to be done by solicitor?
Thanks again
: ) Mitchell
1) Does one need to tell solicitor how much there is in each bank, ISAs etc etc?
2) And after the death WHO calculates the final amount to be paid in Inheritance Tax? Is the executor able to do it or does it have to be done by solicitor?
Thanks again
: ) Mitchell
Executors don't need to employ a solicitor to seek and obtain probate. (Appointing a solicitor as an executor in a will is generally not to be recommended as, unless the estate is particularly complex, there's no need to use one. If the executors decide that they'd rather use a solicitor anyway they're still free to appoint one, with his/her fees coming from the estate).
The executors are responsible for paying the Inheritance Tax and, again, there is no need to involve a solicitor. (See the links from the HMRC page I linked to above).
The executors are responsible for paying the Inheritance Tax and, again, there is no need to involve a solicitor. (See the links from the HMRC page I linked to above).
1) If you do employ a solicitor then they will probably want access to all the accounts rather than take your word for a total (after all that's why you are using them).
2) The executor has the responsibility for calculating if IHT is payable, and on how much - you can pass this responsibility on to a solicitor but it will cost you solicitor's fees which can be quite steep. In the particular case where I was Executor I found one area (property) a bit complex/uncertain but I used the Help Line provided by the Court's Probate Service which eventually gave me an answer.
P.S. When making my own Will I did ask my solicitor's advice on appointing him as Executor. His response was that it was not a good idea because then it tied the Will in to that particular practice which could with the passage of time become an issue - much better to give the role to someone in the family or a friend and then they have the option to appoint a solicitor of their own choice (if they feel it's necessary).
2) The executor has the responsibility for calculating if IHT is payable, and on how much - you can pass this responsibility on to a solicitor but it will cost you solicitor's fees which can be quite steep. In the particular case where I was Executor I found one area (property) a bit complex/uncertain but I used the Help Line provided by the Court's Probate Service which eventually gave me an answer.
P.S. When making my own Will I did ask my solicitor's advice on appointing him as Executor. His response was that it was not a good idea because then it tied the Will in to that particular practice which could with the passage of time become an issue - much better to give the role to someone in the family or a friend and then they have the option to appoint a solicitor of their own choice (if they feel it's necessary).
Canary, the solicitor who drew up our wills said the same thing. When DH died, I went back to him to collect the will and as I didn't feel able to do some of the more complicated bits and also attend the probate appointment, we organised that he would do the bits that I felt unable to do on a job by job basis but that I would remain the executor. It worked very well and I was grateful for his support.
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