Inheritance tax

johnny_uhtar

Hi Hope some one can help - My mother has just died leaving me her "estate" basically the house the house is worth about £120k so is not liable for inheritance tax BUT since 2005 Ive been transfering her savings into my name in case of the nursing home lark
but as she has died within seven years of transfering the money (£45k in total) it will have to be added back to her estate which will still bring it under the inheritance tax threshold -Question is will I have to pay tax in any form on the money not sure if I would have to pay income tax at 40% !!!!!!
Thank for any help

ohmsoft

There will not be any liability to IHT if the estate including gifts is below the nil rate band. So no, there will be no tax payable on the amount.

John_Pierpoint

There are two Inheritance Tax forms:
A big multi schedule one called IHT400
A "simplified" one called IHT205 to be used when it is pretty obvious that there should not be any IHT to pay.
Go to the HMRC site and get the phone help line number then phone and ask for both.
On the figures you have given us it looks like IHT205 should do the job, though those "gifts" might have muddied the waters, if the tax man thinks you are holding the money as your mother's trustee. (YOU have been declaring the interest to the tax man on your tax return ?)
Quote: The total value of the gifts at the time the gifts were made , after taking away any exemptions that are due, must be less than £150,000 ..........................................................................................................................
...................(if not) stop filling in form IHT205 now - you will need to fill in form IHT400