09 Mar 2015

A question about : Will & Expression of Wishes

Hi

I'm currently the executor of my Grandmother's estate and have received a sizeable sum of money from her in it. The will is clear and stipulates as follows:

Son a = receives 44%
Son b = receives 44%
Me = receives 12%

Now in some typed notes that were kept with the will it is noted that my 12% should be capped at a certain amount. Currently my portion is quite a bit larger than this cap and I'd like to know how to handle this. I understand that the Expression of Wishes has no legal standing compared to the will but I intend to abide by it and would like to know how to handle this from a tax point of view.

Do I take the whole 12%, apply the cap, divide the remainder and then treat it as two gifts to the sons from me?

or

Can I cap it at the time and just increase the amounts they receive without worrying about it even though this alters their overall percentage?

The amount is more than the allowed yearly gifts tax allowance. I want to do the right thing but preferably in a way that won't cause me tax indigestion down the road when I come to fill in my SATR etc. Hopefully I'm just overthinking this!

Best answers:

  • Thank you so much. She has signed one of the pages but also my grandmother had discussed these terms with me previously so I was aware of it and surprised not to see it formally noted in the will.
    I will sort out getting this deed made. Copying from elsewhere in this forum will getting this signed on the day I distribute the final monies with relevant amounts suffice? (I've seen some templates including one from the AA Legal Docs but they all appear to be about Ј40 which feels a little steep for such a simple change).
    Template
    Instrument of Variation
    I, Florrie Fimble, of (address) was left a sum of XXXX through the will of my grandmother XXXX, of (address), who died on (date).
    I would like to vary the effect of the will to redirect ЈXXX of the ЈXXX I received from XXXX as follows in order to comply with the Expression of Wishes kept with the will:
    • ЈXXX for son a of (address)
    • ЈXXX for son b of (address)
    The parties to this variation intend that the provisions of section 142(1) Inheritance Tax Act 1984 and section 62(6) of the Taxation of Capital Gains Act 1992 shall apply.
    Signed by FlorrieFimble
    Date
    Witness (name, address, signature, date)
  • There is no gift tax.
    a DOV won't change the tax on the estate
    Your gifts are PET so the only potential saving is if you die within 7 years with a IHT bill.
    HMRC has a checklist to make sure the DOV does that.
  • Be clear what tax you think you are saving.
  • This is solely for IHT reasons for my own estate as it is probable there would be IHT liable on it. Thanks for the advice everyone. I may simply note the money as a gift and hope to survive to my fifties or use the AA legal form rather than the wording I found.
  • Good point Yes hopefully for many more years after the seven year threshold. Clearly spending all this time dealing with my grandmother's mortality has had a knock-on effect!
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