Inheritance tax question.

[min88cat]

I think my head is going to explode with everything that is going on at the moment! You may (or may not!) remember that Uncle passed away leaving Auntie in NH suffering from Vas Dem and then my MIL died , suffering from mixed dementia. (funeral later today)

I had a call from the NH yesterday to say that Auntie passed away in the early hours. I'm just hoping that's the third (and final ) thing this year........

Can anyone advise me on what happens to debts owed by Auntie (NH fees etc) are these paid before inheritance tax is calculated? Or is IHT paid on the total assets and then the debts paid?

Many thanks

 

[nitram]

Debts are deducted from assets for IHT purposes.

Unless it's a big estate you will need to fill in

Form
http://www.hmrc.gov.uk/cto/forms/iht205-2006-2.pdf


Notes
http://www.hmrc.gov.uk/cto/forms/iht206-2006-1.pdf

 

[min88cat]

Thanks Nitram!

 

[nitram]

The NH does not come top of the list for paying of debts.
Scroll down
https://www.moneyadviceservice.org.uk/en/articles/dealing-with-the-debts-of-someone-who-has-died
to see order.

Best not to pay any until the value of the estate has been determined.

 

[Contrary Mary]

I don't know if this will be at all relevant to you, but I just picked up about Uncle and then Auntie dying, and it sounded as though they were quite close together.

My aunt and then Mum died just 9 days apart. Aunt had left a legacy to Mum, which would pass to me if Mum died first. However, the solicitor suggested doing a Deed of Variation so that the legacy would come straight to me, rather than going through Mum's estate. It saved paying tax twice.

Just a thought, in case it's any use to you