Deceased left a homemade Will which gave a ‘sum equal to the IHT threshold, including any transferred threshold’ to her 6 children in equal shares. If the value of the Estate is more than the available threshold, the remainder is to be split between 5 charities.
Deceased had a Stirling Investment Bond, which was a Gift and Loan Trust. Value at death was approx£70k. The initial loan element was £46,000. The Executors have waived the right to repay the loan to the estate, but of course is treated as an asset for IHT purposes. No IHT due, value of estate is over £950k which is the amount of available allowances/threshold. Charities likely to benefit.
Question is - when distributing the Estate, as executors have waived loan element, does the amount the non-exempt beneficiaries (children of deceased) are entitled to reduce by the £46,000, therefore leaving £904,000 available? Any guidance would be appreciated.
Carter Bells LLP