Another will/inheritance one.

[Nonamesleft1]

If someone has received a significant gift (6 figures +) prior to someone’s death, does that form part of the estate?

relative died, about £30k in savings. Executor has released all without needing probate.

however the gifts have not been declared. The executor has simply paid all bills and distributed the remainder.

chances are even including the gifts the estate will be under the iht limit, but there is a slight possibility it may not be.

does this need reporting to HMRC at any point? Or is fine to just settle an estate like that?

As far as I know, the size of the estate needs to be assessed, this includes all gifts made in the preceding 7 years. When the size is known, then it will be clear if inheritance tax is due. If the person was single that is currently £325,000.

That is in England.

If the gifts over the seven years prior to death were less than £325k (after taking into account any exemptions) and the total estate including these gifts was below the IHT threshold, there is no IHT to pay. However, if they gave away more than £250k in the seven years prior to death the executor should report the estate to HMRC.

If there is IHT to pay and the executor has distributed the estate, they may be personally liable for the IHT.

Thank you.

so these gifts do not need reporting to HMRC if they are under 325k? There’s no need for probate?

how does anyone know what the value of the gifts are if they aren’t reported? There’s a known figure of about £150k in the last year, no idea about anything preceding that.

How would that impact on a subsequent spousal estate? If there’s no probate and no accounting for the first spouse how would that work out? How does the executor of the second estate know if there’s iht to pay if they have no access to the first spouse estate value?

They should be reported if they are more than £250k, but there won't be any IHT to pay unless the gifts plus the estate are more than £325k.

Probate is only needed if the deceased owned property or significant assets in their own name, or if the banks or other financial institutions require it.

If the deceased hasn't kept any records of gifts, the executor will have to do their best to track down gifts by, for example, looking through bank statements, etc.

There is no IHT to pay on anything the deceased leaves to their spouse. The second spouse's executor will need to know how much (if any) of the first spouse's IHT allowance is unused. If they don't know that, they can't transfer it.

There is no IHT to pay on anything the deceased leaves to their spouse. The second spouse's executor will need to know how much (if any) of the first spouse's IHT allowance is unused. If they don't know that, they can't transfer it

so how do they apply for probate and IHT?

executor has been told they need spouse 1’s will, the accounts, and previous years bank statements (for gifts) to calculate the estate value. But it appears there’s no way to actually get hold of any of it?

spouse 2 has not received any residual estate. They can’t even prove they are beneficiary to ask for accounts as executor won’t produce will. Which further complicates the iht thing.

I'm confused as to what is going on here. Have both spouses died or just spouse 1? Can you clarify please.

Both. Within 3 years of each other.

spouse 1, executor 1. Thought to have given large gifts before death, but no accounting as under iht level?, any monies released to executor without probate being needed.

spouse 2. Executor 2. Cannot get any information about spouse 1’s estate for iht calculation without permission of E1?

If spouse 2's estate is below the IHT limit, spouse 1's estate is irrelevant.

If spouse 1's estate including gifts used up all of their IHT allowance, their estate is irrelevant.

If, however, the executor for spouse 2 believes there is IHT allowance to transfer and/or that spouse 2 should receive an inheritance, they should consult a solicitor.