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bigduckontax, Accountant
Category: UK Tax
Satisfied Customers: 3814
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By answering my questions: is this tax demand legitimate? I

Customer Question

By answering my questions: is this tax demand legitimate? I received a small bequest, and cannot get the funds until I pay the tax?
Submitted: 1 year ago.
Category: UK Tax
Expert:  bigduckontax replied 1 year ago.

Hello, I am Keith, one of the experts o Just Answer, and pleased to be able to help you with your question.

There is no tax on the beneficiary of deceased's person's legacy in the UK. Any tax due, ie Inheritance Tax (IHT) if the estate exceeds 325K, will be paid by he executors or administrators of the deceased's estate from the estate before distribution. If you are being asked to pay tax there is something fishy here as no tax is due. Were you aware of this legacy? If you were not and it came out of the blue pound to a pinch of salt you are in the early stages of a scam.

I do hope that I have been able to shed some light on your position.

Customer: replied 1 year ago.
Your answer poses yet more questions: is the demand for unpaid tax legitimate?
I received a bequest and must pay tax, but you said it was a scam???
Please help me get to the bottom of this!
Expert:  bigduckontax replied 1 year ago.

It is most unlikely that this request is legitimate as IHT must be settled with HMRC before bequests can be distributed. Trying to extract moneys in this manner is a well known criminal scam, you pay the 'tax' and that is the last you will hear of the affair.

Thailand does have a gifts tax through their IHT, but the Nation advises:

'The inheritance tax is 5 per cent for ascendants or descendants and 10 per cent for others. It is levied on assets worth above Bt100 million, a loosening of the previously planned threshold of Bt50 million and tax of 10 per cent'

This is quite a lot of money, a tad under GBP 19K, before the tax kicks in even under the new rules. The effective date for the rate change is 1 February 2016.