Hi,
It is important to note that the estate should be distributed according to:
- the will
- the law if there is no will
HMRC is concerned with the taxation of the estate and not how the legal personal representatives distribute the assets. It is the personal representatives’/executors’ legal obligation to ensure it is distributed correctly in accordance to the will or the law. For further information on dealing with an estate of someone who has died, please refer to the guidance here:
Dealing with the estate of someone who's died: Distributing the estate - GOV.UK (www.gov.uk).
Further guidance on gifts and gifts with reservation of benefit can be seen here:
Work out Inheritance Tax due on gifts - GOV.UK (www.gov.uk).
Additionally, for detailed examples on how to calculate Inheritance Tax on gifts, please refer to page 18 of the following guidance:
IHT400 Notes IHT400_2022__Notes.pdf (publishing.service.gov.uk).
Thank you.