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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

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Original poster

Inheritance tax for dummies

14 replies

Jeffsmeffsmiff · 05/12/2023 16:28

Sorry not AIBU but posting here for advice.
I'm lucky enough to have been named as a beneficiary in a relative's will. The solicitor contacted me to say that they will be transferring across just over £11k next week. Do I need to pay inheritance tax on that? Or would it have already been paid (if needed) before I receive the money? Also does it count as income? I'm ridiculously nervous of not paying when I should and ending up with some sort of fine. I've never had to pay tax except PAYE and obviously my employer sort that for me.

OP posts:

Cosyblankets · 05/12/2023 16:31

Any inheritance tax is paid from the estate on the whole estate. It's paid when the estate is over 325k

allofthelove · 05/12/2023 16:31

It's on the whole estate , so it should be paid already . You don't need to pay inheritance tax on that as a beneficiary.

Original poster

Jeffsmeffsmiff · 05/12/2023 16:32

Thank you. So anything due would be paid before I got it then? And I don't have to pay anything after that?

OP posts:

Badbadbunny · 05/12/2023 16:32

Any IHT due will have been paid by the estate before you were paid.

There is no personal tax on the lump sum.

BUT, it may affect any benefits you claim if it takes your total savings over the qualifying threshold for benefits.

Chasingsquirrels · 05/12/2023 16:33

Jeffsmeffsmiff · 05/12/2023 16:32

Thank you. So anything due would be paid before I got it then? And I don't have to pay anything after that?

Correct, on both counts.

Caterina99 · 05/12/2023 16:33

Inheritance tax will have already been paid before you get the money.

There is no income tax on this money for you

Original poster

Jeffsmeffsmiff · 05/12/2023 16:33

Thanks everyone. I don't claim any benefits so nothing to worry about on that front.

OP posts:

2jacqi · 05/12/2023 16:35

@Jeffsmeffsmiff you will also receive a slip of declaration for hmrc which you can then forward to your accountant !!

BrimfulOfMash · 05/12/2023 16:37

2jacqi · 05/12/2023 16:35

@Jeffsmeffsmiff you will also receive a slip of declaration for hmrc which you can then forward to your accountant !!

Who issues that? I didn’t get that as one of the beneficiaries of my parents’ estate!

BeadedBubbles · 05/12/2023 16:38

2jacqi · 05/12/2023 16:35

@Jeffsmeffsmiff you will also receive a slip of declaration for hmrc which you can then forward to your accountant !!

What?!

Original poster

Jeffsmeffsmiff · 05/12/2023 16:40

Erm I don't have an accountant 😬

OP posts:

Whatevershallidowithmylife · 05/12/2023 16:41

Never heard of that before either!

BeadedBubbles · 05/12/2023 16:45

Just to echo what others have said, you won't have to pay tax.

www.gov.uk/tax-property-money-shares-you-inherit

BrimfulOfMash · 05/12/2023 17:08

Jeffsmeffsmiff · 05/12/2023 16:40

Erm I don't have an accountant 😬

Neither do I… and if you are not on benefits, and the interest on this £11k if you put it in a savings account doesn’t take your total annual earnings from interest over £1k I can see no reason why there should be any admin, tax or accountancy ramifications at all!

(If you save in an ISA the interest is tax free- only important if your total interest from savings would be over £1k - and winnings from Premium Bonds are tax free).

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