Strange question about probate and inheritance tax

[KneeOnLite]

My mum died last week, and I informed the solicitors administering a 250k lifetime trust that my mum was left by a cousin, I called the company to inform them of her death, so no further payments were due. The person I spoke to said I would probably have to pay inheritance tax on the 250k, that's money that I don't inherit or get any payments from, The same company holds the will so they would know I'm not named. I have a copy of my mums cousin's will and the whole of the amount goes to family in Canada. I am not named in the will, so there is no inheritance and no capital gains.

Why would they say that I have to pay inheritance tax, they also said I should add it to probate forms I am currently starting. I'm sure this is not right but would like to know for sure 250k would push me well over the tax threshold.

Just to be clear I never received anything from this trust, I'm not named in the will of my mum's cousin to inherit after my mum's death.

This all seems strange to me, surely the people who inherit will pay the taxes due, or the actual fund should pay. Not me, who has nothing to do with it.
As I said, I'm going to start probate and need to be sure about this

[atticus]

I suggest that these people are not well informed. Have you asked them why they have said what they have said?

Inheritance Tax is payable out of the estate of the deceased person.

[KneeOnLite]

I suggest that these people are not well informed. Have you asked them why they have said what they have said?

Inheritance Tax is payable out of the estate of the deceased person.

Yes that's what I thought the clue is in the name '' Inheritance Tax'' I'm not inheriting anything. I did ask how they have come to that conclusion, and really they just said it's normal to have to pay it. When I pushed more, they said they will check if it can be paid by the estate.

The deceased person was my mum, she received a monthly interest payment on the capital of 250k. That 250k now goes to the others named in the cousin's will, and not to me.

If they want to give me the 250k I will happily pay the inheritance tax, However right now I'm probably going to ask them to put it in writing to say I'm responsible for paying this tax even though I never received a penny or will receive a penny from this trust. I'm quite sure they won't do this.

[atticus]

Why not just ignore them?

[Pezza54]

It is possible that your mother inherited income from a Life Interest Will Trust, sometimes called an Interest in Possession Trust
The terms of the trust may state your mother receives trust income whilst she is alive, but when she dies the asset passes to the remainder men in the cousin's will
If this is the case, your mother may have paid income tax on the trust income. There is no need to include the £250k in her estate

[KneeOnLite]

Why not just ignore them?

I probably will do that, however i just wonderd if they were right because they were insistant, I really dont want probate to come back to me and say you were told about this why didnt you tell us.

[atticus]

The possibility Pezza54 raises is another reason for you to ask them to explain why, should they come back to you.

[KneeOnLite]

It is possible that your mother inherited income from a Life Interest Will Trust, sometimes called an Interest in Possession Trust
The terms of the trust may state your mother receives trust income whilst she is alive, but when she dies the asset passes to the remainder men in the cousin's will
If this is the case, your mother may have paid income tax on the trust income. There is no need to include the £250k in her estate

Yes this is what happend, Others will now get the income, from the 250k or whatevers left, if they have passed the sum will go to a named animal shelter.