Inheritance/assets confusion... please help!

[cuppa18]

Hi just hoping someone can help as we're a bit confused regarding assets/ inheritance. A single parent has died and in the months/ years before their death they transferred money to a friend in another country with the understanding that this friend would spend the money on regular religious type rituals on behalf of the parent's only (adult) child. Enough money remains with the friend to continue paying for these rituals for many years. The child does not agree with these rituals and finds them deeply unethical, especially because the organisation tells you that your family will be on danger unless you pay for these rituals! Does the remaining unspent money being held by the friend, that was sent by the parent, still count as part of the "estate/assets"? It was not mentioned in the will and no formal paperwork exists to cover this arrangement, although it is probably discussed in emails. Does anyone have a better understanding of inheritance law etc than we do and can help us work out if this money is technically still the property of the parent? Is there any official terminology that would help describe this situation? The adult child would like to prevent this organisation profiting any further from the family. Can anyone offer any guidance to us please?

How much money are we talking about? I have no idea on the legalities but this sounds like the kind of thing that would cost more to fight than it would be worth, especially if the money is held in another country and was willingly given over to them.

I'd definitely as the solicitor - but if the parent sent the money of their own accord, to pay for an ongoing service, then it's not part of the estate as far as I'm aware (from my experience it was a subscription paid ahead of time so not quite the same but similar in terms of money paid upfront for a service).

How much money was it?

@TheFlis in the region of £30,000 to £40,000 has been sent, we don't know at this stage how much remains

The deceased sent money to someone to perform a specific service on behalf of a third party. I assume the third party didn't do anything to stop this happening before the deceased passed away?
The money is gone - it doesn’t form part of the estate. The recipient could burn it, spend it on a wild time or just leave it in their bank.

With that amount of money there could be Inheritance tax implications. There are limits to the amount of money that can be gifted - a total of £3000 a year. It’s important to know what amounts were sent each year for the past 7 years.

https://www.gov.uk/inheritance-tax/gifts#:~:text=Annual%2520exemption,%C2%A33%252C000%2520between%2520several%2520people.

Depends on the total value if the estate. If it's less than £500k (£325k if no property ) then no iht is due in any of the payments and it's the estate who pays the iht.

But if the person is abroad, they don’t have any HMRC tax obligations—they will be liable for gift tax obligations in their own country, no?

It's the person giving the money who pays the tax...the deceased....not the person who is receiving it. That person seems to be in the UK

Ah….so they go through the 7 years of transactions and count these as international gifts, and subtract the tax owed from the estate before paying out? I didn’t realise that…

Yes this. For £30k I'd be inclined to leave it.

Which is why I said “could’ not ‘will’.!

For that amount of money it's probably not worth the legal costs of following up, whatever the circumstances. Unless the recipient is likely to "refund" the unspent money to the estate I'd just wave it goodbye.

It wasn’t a gift though! Even if the person has been scammed, they paid the money for a service, the recipient is likely to claim they have performed the service and that’s the end of that.