IHT, probate and gifts

conned_2

IHT and gifts
Can anyone advise me- I am the executor of a relative’s estate. My relative made lots of gifts up to six years before he died, to various relatives. I had some involvement in his financial affairs but am not aware of everything he did- do I need to research and declare every single item to the solicitors who are doing the probate for me?- their job is pretty straightforward as his affairs were in order before his death. What happens if I miss something or something turns up years or months later to change the tax position. Are the gifts included in the estate for purposes of inheritance tax? I know about the sliding tax relief on gifts but some info suggests they are included for IHT as well.I know about the exemptions for small gifts etc- I suppose I need to decide now how far back and how deep to go to check all the gifts that were made- this is taking up so much of my time and the solicitor says they will charge £150 an hour for the job. I will probably just check the main ones and say that’s the best I can do- surely that will be enough for the revenue, as long as I haven’t willfully deceived them?
I am taking professional advice about this, and will value any more suggestions anyone has.

ukmaggie45

The Revenue requires detailed accounts and valuations. These can be adjusted later if IHT has been overpaid (eg if property goes for less or more than the Probate Valuation).

I think that there is a 7 year rule for gifts where IHT is concerned, and the amount of value decreases by 1/7th a year for IHT purposes. (i.e. the donor has to survive for 7 years from the Gift for it to not count at all for IHT, tax due is on a sliding scale)

I suggest you look at HMRC website and read as much as you can for yourself. That way you are not totally dependant upon a so-called professional to advise who may not actually know that much or be that bothered. (can you tell I have had probs myself? )

Also if you are Executor you should be able to get copies of Bank Statements from your relative's Bank (or Banks)? Payments would likely show up in these? If the Gifts were in cash and not via a bank it might be more difficult.

I'm sure someone more knowledgeable than me will be along to help soon.

I am not a legal or accountancy professional (merely a cross consumer! :rolleyes:), so do not rely on my post!

monkeyspanner

Having done this recently I believe you need to go back uo to 7 years and look at all gifts that exceed the anual exemption and small gift allowances. There is provision to carry forward any unused exemption from one year to the next. But you cannot carry forward an allowance more than one year. The small gift allowance cannot be used in addition to the main exemption in the case of gifts to any one individual. The probate office were pretty helpful with the queries I had. Also I think they are pretty relaxed about being very precise if the estate is under the IHT threshold.

There will be some circumstances where a gift cannot be identified dependant on the records the deceased kept. But you do have to swear an oath that the information you provide is accurate.

conned_2

thanks for that advice- very useful.