Beware: Executor Personally Liable to Pay Inheritance Tax Bill

Author: Mitchells Roberton
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Acting as executor for an estate carries a great deal of responsibility and while the majority of executries are completed without incident, complications can arise and executors can sometimes find themselves in a difficult and unexpected situation.

At some point in our lives many of us will be asked to be an executor for a friend or relative’s estate. This can seem like an honour but you should make sure you know the obligations that come with being an executor before you agree to take on the role.

When that person dies, you, as executor, will be expected to administer their estate, making sure that the wishes in their will, if there is one, are respected. As part of this role you would have the estate valued for Inheritance Tax purposes and that any tax bill is paid. This may not come as much of a surprise but what might come as a complete shock is that an executor can be personally liable for the IHT bill even if they are not a beneficiary of the estate.

In one recently reported case Glyne Harris had been appointed executor of an estate worth around £1.2 million. He identified the assets belonging to the estate and filed an inheritance tax return with HMRC and paid some of the tax due with money from the estate. However, he then agreed to pass the majority of the estate to one of the beneficiaries before the rest of the tax was paid, on the understanding that this beneficiary would pay the outstanding tax.

Unfortunately the beneficiary reneged on this and moved to Barbados without meeting his tax obligations. This meant that the executor was responsible for paying the outstanding inheritance tax from his own funds.

Mr Harris appealed against this liability but the First-tier Tax Tribunal struck out his appeal. Personal representatives should ensure that funds are made available from the estate to meet inheritance tax liabilities before making distribution of funds to beneficiaries.

This is an extreme case but employing the services of legal professionals to help you administer the estate can ensure the role is carried out correctly and minimise any personal risk to yourself.

If I can be of assistance please contact me Heather Warnock on 0141 552 3422 or by email

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