Can you pay IHT out of your inheritance?

IHT is the acronym for Inheritance Tax and nobody who inherits normally pays inheritance Tax on their inheritance.

The reason for this is that the Executor if they have a Will or the Administrator of the estate if they don’t have a Will, is responsible for paying inheritance Tax before any of the estate is distributed. This should mean that in almost all cases Inheritance Tax has been paid prior to anyone getting any inheritance. As with most things you can always construct an exception which would be if the deceased had gifted to a beneficiary a sum of money, that when added back into the estate made the estate liable to pay IHT. This could happen if the gift was made less than 7 years before they passed and as they are no longer able to be held liable the responsibility transfers to the recipient of the gift to pay the IHT. If you feel this could affect you and you would like to know more then do give us a call.