Right of Occupation & IHT

I have an estate where the deceased left a right of occupation to his 2 grandchildren, who where and continue to live in the property. The residue is then split 4 ways, including to the 2 grandchildren.

Issue is that there are not sufficient liquid assets to meet the IHT liability (30K). Can the occupants state that they will pay the tax and interest in instalments and then recover from the estate when property subsequently sold, if so would they be entitled to recover the interest on the IHT or just the initial liability?

Or can the other beneficiaries insist that the property is sold to pay the liability and avoid interest on the IHT?

The will does not state that the trustees can sell and buy another property for the occupants.

Sally-Ann Joseph
Rose & Rose

If IHT is paid by instalments, I would see the interest thereon as a cost of occupation and, therefore, payable by the beneficiaries entitled to occupation.

If the 2 grandchildren can fund the IHT instalments that would seem the most straightforward solution, recovering the IHT paid when the house is sold, before the division of the balance of the proceeds between the 4 beneficiaries.

Whilst the other beneficiaries could insist on a sale of the property to pay the IHT (which might end up in the courts), the costs of managing the dispute and fall out (both financial and emotional) could be significant and a practical, and amicable, solution, such as has been suggested would seem the better way forward.

Paul Saunders