What does this phrase mean in easy english please.?

[Bobbyboy]

I give the maximum amount that can be given by this will without inheritance tax becoming payable in respect of the gift to be divided equally between Mr AB and Mr XY.

[PallasAthena]

I wish I could give you a plain English translation but on its own it makes no sense. Was it drafted by a solicitor? Maybe it makes sense in the context of the whole Will as a whole. If the amounts of £££ involved are substantial you may need to take legal advice.

The reason it makes no sense is that it seems to be dealing with IHT backwards, as if the amount of IHT depended on the size of the gift. But that's not how it works. The IHT is calculated on the size of the Estate at date of death and paid to HMRC before any gifts are paid out to beneficiaries. What's left can the be paid out as gifts (as long as there's enough money).

What is your role in this? Are you an Executor or beneficiary?

[Bobbyboy]

Thanks for your reply, yes the will was drafted by a solicitor and as far as I can gather the estate is worth approx 1 million pounds, being left to two people and four charities.
Yes I am an executor.

[Pezza54]

Assuming the deceased did not have a spouse or civil partner that predeceased them, then the deceased's IHT nil rate band is currently £325K
Gifts left to registered charities are exempt from IHT
This means that to avoid IHT, £675k should be passed by the executor to the charities after first checking the charities are registered
This leaves £162,500 each for the 2 beneficiaries

[Bobbyboy]

Thanks for your reply, appreciated.