Inheritance Tax

[Hopkirk]

How are the executors of an estate expected to identify gifts over the previous seven years?

Do they literally have to trawl through bank statements? With the modern paperless world, there might not be any to see.

If they find money going out, how can they tell if it is a gift or a legitimate expenditure?

[tomus42]

If you want to be 100% legal, you do literally have to trawl through bank statements, which is why no-one in their right mind wants to be the executor of a will.

If you can prove it's an expense, fine. If it's just money given, it's seen as tax evasion unless they gave it more than 7 years ago.

I've no idea how they arrived at 7 years as the time limit.

 

[THECORBYLOON]

Just read about an executor dealing with a £1.3 million estate back in 2013. He dished out the assets and it was agreed the major beneficiary would pay any remaining inheritance tax (IHT) that was due.

Unfortunately that beneficiary left the country without paying the IHT and a subsequent court case confirmed the executor was personally responsible for £341,278 in IHT.

[Old_Geezer]

The more you hear about law the more ridiculous some things seem.

[douglas9401]

'The law' is there to keep the plebs in line, nothing more or less.

[youngmafbog]

And take their hard earned Douglas.

[davebro3]

More to the point - if not reported by the executor(s) how does HMRC find out about gifts in the 7 year period?

[Hopkirk]

I guess that occasionally HMRC will investigate an estate thoroughly 

[Old_Geezer]

That'd save the executor the trouble.

Doesn't a solicitor sort this out for you ?