Executors of a person's will have instructions to split the estate 50/50 to family and a charity. The estate includes a house (estimated value £320,000).
Will the charity be liable for any Tax, VAT, Stamp Duty, Inheritance Tax ?
If so, is any of it recoverable by the charity ?
-- Edited by ProBowlUK on Wednesday 21st of September 2011 04:15:15 PM
I'm not an expert but as far as I am aware the value of the estate will be subject to inheritance tax before the bequest is made. The charity will then receive it's 50% which it will treat as a donation which is outside the scope of VAT.
Bequests to charity are exempt from inheritance tax.
Therefore only 50% of the estate may be liable to inheritance tax.
I seem to remember reading about a charity which went after the other beneficiaries (and won), as the charity received the bequest after inheritance tax had been paid out of the estate. As this meant the bequest was reduced, the charity successfully sue the other beneficiaries for the deduction of inheritance tax.
