At Wilson & Fish, our executry solicitors have a wealth of experience in advising clients on Inheritance Tax (IHT) matters. We understand that the relevant laws are complex and highly technical, and so we always offer clear and pragmatic advice on calculating and paying IHT.
If you are an executor of an estate in Scotland and looking to obtain Confirmation and to wind up the estate, contact our solicitors for a quote on 0141 222 7951 or complete our online enquiry form.
IHT is not payable on all estates. As a general rule, IHT will only be due if the total value of the deceased’s assets is over £325,000. Any assets over this value will be subject to 40% IHT. However, this general rule is subject to a number of exceptions, including:
- The threshold is £650,000 (i.e. double) for a married couple or civil partners, if the surviving partner is the sole beneficiary of the estate.
- If the deceased’s residence is bequeathed to a direct decedent, and additional main residence nil-rate band applies. This is £125,000 in the 2018/19 financial year, and will rise to £150,000 in 2019/20.
- IHT is generally not payable if the deceased left their entire estate to charity or to a community amateur sports club.
Clients are sometimes surprised to learn that IHT will also be payable if the deceased made gifts over the value of £325,000 (cumulatively) in the seven years before their death. This is also, however, subject to exceptions. Small gifts, such as birthday presents, will usually be treated as ‘exempted gifts’, as will any gifts given to a spouse or civil partner. Anything of value (money, property, or other possessions) can be treated as a gift. If you transfer an item for less than its market value (for example, you sell your home to your child for less than its worth), the difference in value is a gift for IHT purposes. The amount of tax payable depends on the length of time between the gift and the deceased’s death.
Once six months have passed since the date of death, IHT has been paid, and the confirmation has been obtained, the executors must also arrange for payment of any unpaid income tax and capital gains tax in respect of the deceased’s income up to the point of their death. Payment of these types of tax involves additional calculations and administrative procedures. Our solicitors will ensure that these matters are dealt with accurately and efficiently to ensure that the process of winding up the estate is not unnecessarily delayed.
For more detail on Capital Gains Tax issues, please see our detailed guide here: Capital Gains Tax in Scotland – An Executor's Perspective.
Expert Executry Solicitors Scotland
Every estate is different, and so it is crucial to obtain expert advice on the IHT liability on each individual estate. If you are an executor arranging for payment of IHT, the assistance of an experienced executry solicitor can be invaluable in easing the administrative burden. We are able to interact with HMRC on our clients’ behalf, and provide reassurance that the IHT, capital gains tax, and income tax have been accurately calculated. We also advise clients aiming to minimise their own IHT liability.
Wilson & Fish can assist if you are an overseas solicitor seeking assistance with IHT matters arising in respect of Scottish assets.
Contact our Executry Lawyers Glasgow, Scotland
If you would like to discuss inheritance tax matters, or any other executry issues with one of our expert solicitors, please contact us by telephone on 0141 222 7951 or via our online form. Based in Glasgow, we assist clients throughout Scotland including Ayrshire, Falkirk, Edinburgh, Aberdeen, Dundee, Paisley, East Kilbride and Stirling.