Chapters Financial News

Inheritance tax applied to an estate is usually an emotive topic. Death brings many recollections and emotions, and the complication of administering an estate can be troubling at a time of great grief.

Knowing the amount of an inheritance tax bill and having the funds to pay it can be two very different things.

At the time of writing this blog, many will be aware that we have a Budget announcement on 06 March and there is much speculation that inheritance tax is on the hit list to be reviewed. It is also well known to many, not least the International Monetary Fund (IMF), that there is not much surplus to 'give away'. All will be revealed in the early part of March 2024.

We also have to be mindful that we have a general election at some point in the next year (January 2025 at the latest) and any new administration may reverse any changes made in the last few months of the current incumbents.

The current thresholds for inheritance tax are detailed on our website and can be found here: https://www.chaptersfinancial.com/private-clients/inheritance-tax-planning

We will aim to update these details promptly if any changes come from Westminster in the coming weeks.

If you have an inheritance tax liability to pay, then you might find the money yourself, or indeed borrow from a lender, noting that there would usually be costs and charges to do so.

Alternatively, some investment providers will allow an executor to instruct them to make a payment direct to HMRC to meet a tax liability. In order for a provider to arrange for any investments to be sold to raise funds for the payment of Inheritance Tax, they will usually require the following:

• An original Death Certificate.
• A copy of the HMRC Inheritance Tax calculation form confirming the full amount due.
• Confirmation of who to pay – this would be either the Solicitors dealing with the Estate or HMRC – along with the exact payee and bank details.
• The next of Kin/Executor(s) signed authority confirming the amount required.
• A copy of the Will providing details of the next of Kin/Executor(s).
• Confirmation of which fund(s) and from what product(s) you want the provider to sell down from to raise the requested Inheritance Tax amount.

Each provider may have differing rules and requirements, and some may decline to offer this type of option. Therefore, if you are in this position, it is worthwhile checking (or your legal adviser checking) early to see if this is an option if you need to access funds to meet any required tax liability on an estate. You may want to seek good legal advice in your circumstances.

Please do contact us if you would like to discuss your own situation, or that of a relative.

No individual advice is provided during the course of this blog.

Keith Churchouse FPFS
Director
CFP Chartered FCSI
Chartered Financial Planner

Chapters Financial Limited is authorised and regulated by the Financial Conduct Authority, number 402899