Home > Your Inheritance > Dealing with Tax Payments

Dealing with Tax Payments

By: Mike Watson - Updated: 7 Sep 2012 | comments*Discuss
 
Grant Of Probate Gifts Inheritance Tax

It is the responsibility of the Personal Representative to deal with Inheritance Tax payments and make sure that the correct amount id paid on time. No leeway will be given and the Tax Office frowns as much on the evasion of Inheritance Tax as on any other form of tax – grief will not be taken as an excuse for mismanagement of Inheritance Tax affairs. Paying Inheritance Tax can be an unforgiving task - see below for a guide that will make things easier.

Making Payment

The first thing the Personal Representative will have to do is fill out the relevant form – depending upon how much the Estate due for taxation is worth (following a valuation: see related article for further information).

Inheritance tax must then be paid on the Estate within 6 months after the end of the month in which the deceased passed away. The Inheritance Tax can be paid in installments, although interest may be accrued. The Personal Representative must first gain a reference number from the internet before they can go on to fill out form IHT200, upon which a pay slip will be generated, which they can then use to pay the first installment if tax, which is payable on the liquid assets of the Estate. When the first installment of tax is paid on the liquid assets it is then possible for the Personal Representative to be given Grant of probate so that they may then gain access to assets such as property. Following this they will have to pay tax on the property, which can be paid in installments over ten years.

If six months elapses and tax is not paid on the liquid assets, then all tax on liquid assets will be immediately due together with the first installments of property and other assets.

If payments cannot easily be made (i.e. if there are insufficient assets to cover the tax payable on the property assets) then the Tax Office must be informed, and a loan from a third party must be sought.

Payment of Inheritance Tax can be made by any number of methods: by cheque, bank transfer or Giro from a joint account held between the deceased and yourself as Personal Representative, by the same methods but from your own account, which you can then take back from the Estate upon the following Grant of Probate, or from the Deceased’s bank account or Government Stocks.

Once all payment has been made you will receive a certificate of confirmation to that effect, which you must keep as proof of payment.

If gifts have been made under the Seven Year Rule (whereby Inheritance Tax can be avoided on those gifts if the benefactor lives a further Seven years) and the benefactor then dies, tax will be paid by the beneficiary on that gift at an amount dependent on how long the benefactor survived after the gift was given. If the gift was passed on to a third party then they will be liable for the tax. In this case the Personal Representative is responsible for bringing to light such gifts as part of the Estate.

Business Energy With a Difference

If you are looking for business energy or need advanced solutions like remote energy monitoring, new supplies, downgrading or upgrading capacity have a no obligation chat wuth Purely Energy. To find our more get in touch here..

You might also like...
Share Your Story, Join the Discussion or Seek Advice..
Why not be the first to leave a comment for discussion, ask for advice or share your story...

If you'd like to ask a question one of our experts (workload permitting) or a helpful reader hopefully can help you... We also love comments and interesting stories

Title:
(never shown)
Firstname:
(never shown)
Surname:
(never shown)
Email:
(never shown)
Nickname:
(shown)
Comment:
Validate:
Enter word:
Topics