It's a Will one. Probate question.

[cheekychops68]

Df found out a sibling was given a large sum of money when their only dp sold their home. This was last year. They're both in the will. Sibling has POA.
The dp is very old and will be lucky to live many more years.

Surely that amount will be counted when the will is read?Are there searches to see what's been given? Df tried looking but it gets so confusing.
Sibling is the closest to the dp.
Sounds awful talking about a will when someone is alive but I feel there's going to be a shit show.
Any advice or has anyone been through this? TIA

Thanks - I genuinely thought that all of the tax came out of the residual estate, provided there was enough £ ie the person didn’t gift most or all and promptly die. On grounds that HMRC just want to be paid what is due from the estate and don’t especially want to muck about recovering from individuals if they can get it direct.

As long as there is enough money to pay the foreseeable future bills there shouldn't be a problem, why do they worry about the will though

No worries, it’s something that a lot of people don’t realise!

Probate literally deals with the assets and debts of the deceased person at the time of their death. In other words, how much they were worth (net value) on the day they died.
IHT deals with tax on the value of an estate on the day they died, but does take into account certain things such as whether the deceased gave any gifts over 3K per year in the preceding 7 years. So you say they gave away £60k, therefore £60k would be added to the net value in order to ascertain if IHT is due.

Just to add to the reply from @TipsyBrickPanda , if the failed gift is more than £325k then it is the recipient of the gift that is primarily responsible.

This is due to Section 204(8), Inheritance Tax Act 1984.The estate also becomes responsible if the tax is unpaid after 12 months.

But if the total value of failed gifts is less than £325k then there is no IHT for the person who received the gift to pay. It simply means that there is less of the tax free threshold available to the estate.
.

Tipsy also mentioned "oldest to most recent", this is something to also consider. Here is an example

Take your long-lost uncle. He dies in 2024 but in the seven years previous to that he gave various gifts to his nephews/nieces:-

• 2017 A gets 100,000
• 2018 B gets 100,000
• 2019 C gets 100,000
• 2020 D gets 100,000
• 2021 E gets 100,000

Now, the first 325,000 is exempt so A, B and C don't have to pay any tax.

Since A, B and C have used up 300,000 between them, D only gets 25,000 tax free and has to pay tax on the remaining 75,000. But, because it is between 3 and 4 years ago they pay a reduced rate of 32%.

Poor old E, being the last to the party has to pay tax on their full 100,000 gift.

Hope that makes sense?

Thank you for the further info @Another2Cats and @TipsyBrickPanda

Estate minus any taxes that are due will be divided evenly amount the DC of the deceased unless the will says otherwise.

OP, as you do not think the estate (including the £60k) will be more than £325k , then all this tax info (interesting as it is) really is not a worry.

The £60k gift is not a worry
IHT is not an issue if the estate stays under £325. More if the man has ‘inherited’ a late wife’s allowance).

Do Not Worry!

@MilletOver thank you. I've passed this on. I worry for others a bit too much. You've been very helpful as have others.