my father is a pensioner who pays tax on the interest earned on his savings. he has just inherited £32000 from his brother will there be any tax to pay on this on his brothers behalf and what is the best thing he could do with the money i dont think my mother pays tax. Also i am not sure but the brother may have been overpaid some money from the DWP what is the situation about them claiming it back after death?

thankyou

Hi pammie --- Firstly if there are any valid claims on your deceased Uncle's estate, that is the responsibility of the executor(s) charged with handling the estate to settle the DWP overpayment ( I advise writing to the DWP giving NI number asking this.), along with settling all other legitimate debts from other sources before distributing any of the net assets to named beneficiaries in the will.

Once the executor(s) have probate granted & paid any qualifying debts and any possible inheritance tax due on the net estate currently left over the allowed £312,000 (individuals) in total before any IHT is due, then the money can be divided according to the will.

Once your Dad receives his bequest he personally will pay tax on the interest that the savings make, unless he invests in a tax free ISA.

He could also utilise the unused tax allowance that your Mother has by transferring the rest into her name (your mum would need to register as a non-taxpayer at the bank(s) ) as the interest earned on £32000 will not take her over her personal tax threshold if she has no other income.