Inheritance tax


F

fishman

If one's parents die owing lots of money, is there a reverse
inheritance tax in which the government provides family members with
money?
 
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R

Ronald Raygun

fishman said:
If one's parents die owing lots of money, is there a reverse
inheritance tax in which the government provides family members with
money?
But family members do not inherit the debts, they are automatically
cancelled, and if there is no negative inheritance, there is no need
for a negative inheritance tax.
 
B

bobmaxwell

But family members do not inherit the debts, they are automatically
cancelled, and if there is no negative inheritance, there is no need
for a negative inheritance tax.
Surely the debts are inherited in a manner of speaking, ie if a
creditor knows their debtor has died are they not entitled to their
share of the swag?
 
R

Ronald Raygun

Surely the debts are inherited in a manner of speaking, ie if a
creditor knows their debtor has died are they not entitled to their
share of the swag?
What swag?

Obviously if the deceased had more assets than debts, the debts would
be paid from the assets. If the debts exceed the assets, then the
creditors would get short-changed, but would basically get all the
assets and the heirs would get nothing, apart, perhaps, from low-value
personal effects.

Perhaps I should have made clear that I'm (and assumed the OP was)
talking about the estate being in net debt. Then the heirs would
not be expected to pay up.
 
F

fishman

Thanks to the good answers to my really badly worded question. Reading
it back after posting I was expecting some flaming. It was a
hypothetical question on a topic that really interests me. The value of
todays houses means that if one is the sole heir to even a modest
house, one would need to take out a mortgage to pay the inheritance tax.
 
R

Ronald Raygun

fishman said:
Thanks to the good answers to my really badly worded question. Reading
it back after posting I was expecting some flaming.
Flaming? On uk.finance? Never!
 
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B

bobmaxwell

Obviously if the deceased had more assets than debts, the debts would
be paid from the assets. If the debts exceed the assets, then the
creditors would get short-changed, but would basically get all the
assets and the heirs would get nothing, apart, perhaps, from low-value
personal effects.

Perhaps I should have made clear that I'm (and assumed the OP was)
talking about the estate being in net debt. Then the heirs would
not be expected to pay up.
Thanks Ron, I assumed we were discussing a deceased that had an estate
worth something.
In this case, a rich deceased who has been dodging creditors, how do
the creditors find out their debtor is dead? Can the inheritors (who
may be unaware of the debts) inherit the lot or does the
willmaker/solicitor/executor have to advertise these assets and the
debtor's death?
 
R

Ronald Raygun

Thanks Ron, I assumed we were discussing a deceased that had an estate
worth something.
Why did you assume that? The OP proposed the concept of negative IHT,
and since IHT is levied on the net value of the estate (except for the
first £275k), the only way you could have negative IHT is if the net
value of the estate were itself negative, or less than £275k. I think
if estates worth only (say) £175k were to get an IHT "cashback" of
£40k, we'd have heard about it before now! :)
In this case, a rich deceased who has been dodging creditors, how do
the creditors find out their debtor is dead?
They pay someone to read the papers for the death notices.
Can the inheritors (who
may be unaware of the debts) inherit the lot or does the
willmaker/solicitor/executor have to advertise these assets and the
debtor's death?
The executors are expected to know (don't ask how) about all assets and
debts of the deceased, and draw up a complete account to come up with
a bottom line.

If a forgotten creditor turns up out of the blue after all the assets
have been distributed, I believe the executor can be held personally
liable. Insurance is available to come such eventualities.
 
T

tim \(moved to sweden\)

fishman said:
Thanks to the good answers to my really badly worded question. Reading
it back after posting I was expecting some flaming. It was a
hypothetical question on a topic that really interests me. The value of
todays houses means that if one is the sole heir to even a modest
house, one would need to take out a mortgage to pay the inheritance tax.
But as the occupant of this house had died it would be empty,
so one could sell it, couldn't one!

tim
 
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B

bobmaxwell

In this case, a rich deceased who has been dodging creditors, how do
They pay someone to read the papers for the death notices.
EVERY local rag in the UK?! And does every death have to be followed
up by a notice? There are about five notices a week in our paper.>
 
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