Who is liable for the IHT?

[paulnotcluedup]

Unrelated question to my previous post - (this is for someone else's estate)

Aunt made £256,000 worth of PET's preceding her death (200,000 - 5yrs pre-death and £56,000 1 year pre-death)
She then made £500,000 (5 x £100,000) worth of cash legacies in her Will

Do the PET's use up the £325,000 personal allowance first - or do the Will legacies?

Please would someone be able to set out the order in which IHT will be charged and who should pay - the estate or the recipients?

Many thanks for your help.

[someone]

The gifts use up the allowance first, so 256K of the allowance will be used up by the PETs. This, unfortunately, means that the taper relief on the 200K made 5 years ago doesn't achieve anything.

The estate will have to pay the IHT, if there are specific bequests then the default is that the IHT is paid from the residue, so assuming there's enough residue and the 5x100K bequests are specific then those gifts will also be paid without IHT being deducted.

If there isn't enough residue then the specific bequests will have to be adjusted.

Most of these things are the default and wording in a will can affect who ultimately pays the IHT but in the first instance it's the estate who pays the IHT and then whatever is left gets distributed according to the terms of the will. Any ambiguity is likely to see a large chunk of the bequests disappear in legal fees unless the beneficiaries can avoid a dispute. The executors can be personally liable for any shortfall to a beneficiary where the estate is not distributed according to the will and law and fairness doesn't come into it.