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Tony Tax
Tony Tax, Tax Consultant
Category: UK Tax
Satisfied Customers: 15708
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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i have been charged 50% tax on income from inheritance (which

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i have been charged 50% tax on income from inheritance (which was £100k or so) - i thought inheritance was exempt if below £350k?
Hi.

Do you mean that you have paid tax at 50% on the £100,000 you inherited or 50% tax on the interest/income you have earned by placing the £100,000 inheritance in a savings account or another investment vehicle?
Customer: replied 3 years ago.


It seems to be on the actual £100k I inherited it as it was in a bank account but did not really earn much interest in the year or so it was in the account..


My statement says income received was employment money, trusts and estates totalling £249k with tax due on all...

Thanks.

Did you disclose the £100,000 inheritance in your tax return? If so, where?
Customer: replied 3 years ago.


yes - in the sa107 trusts section of the tax return


 

If you inherit money, there is no need to disclose it to the tax office unless you are asked why you suddenly seem to have earned alot of bank interest, for example. You have disclosed the £100,000 inheritance which isn't taxable on you, as income.

You need to amend the tax return by doing away with the trust pages unless you have income from a trust and put a note in the white space (box 19 on page TR6 of the return to explain the mistake. The tax office should then amend the tax calculation but you might be asked to provide evidence of the source of the inheritance. The executor of the deceased estate from which you inherited should be able to assist in that regard.

I hope this helps but let me know if you have any further questions.

Tony Tax and other UK Tax Specialists are ready to help you
Thanks for accepting my answer.

One final point. If the £100,000 had income added to it such as bank interest earned between the time of death of the deceased and when it was paid to you, that is taxable and should be disclosed in your tax return. There may have been none and the estate executor will be able to tell you whether there was or not.

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