I am dealing with the IHT400 and probate application in an estate where the deceased gifted 3 x £360,000 to her sons 7 years before they died. They have all been brought back into the estate and taper relief will apply as they were made between 4 and 5 years of death.
First, the residue clause says ‘…to pay out of my ready money and out of the proceeds of such sale my debts funeral and testamentary expenses and any inheritance tax…’ Do forum members agree that a contrary intention has not been shown in the will and that the recipients of the lifetime gifts bear their own tax, even though it says ‘any inheritance tax’?
Second, one of the donees is likely to be difficult and won’t want to pay the tax attributable on their lifetime gift (which will be circa £35k). I understand that if the tax is unpaid after 12 months then HMRC will look to the executors to settle the tax and then the executor will need to issue proceedings to recover that from the donee. Does anyone know of any case where an executor has been successful in recovering the tax from the donee? I looked on Lexis Nexis and couldn’t find one.
Many thanks in advance for the help.