Tax free gifts

shaz_mum_of__2

Hi my elderly MIL has recently sold her home and wants to give the money to my hubby and his brother (100k each)

Have investigated online but very confused am i right in thinking hubby and brother would not pay Capital gains tax but that upon her death CGT would be payable ??

To confuse matters more she and her now dead husband set up some sort of trust which none of us understand, the best explanation is that it is a virtual debt which helps with tax and means testing and that means inheritance tax will be minimised upon her passing

Any help greatly appreciated

Shaz

fengirl_2

CGT only arises on the sale of a property which was not the owners main residence. If this tax was due, MIL would be liable.
If she dies within 7 years of making these gifts, her estate may be liable to Inheritance Tax. But if there is some sort of trust, you need to ask the solicitor dealing with it what it involves and whether these gifts are affected by it.

shaz_mum_of__2

Thanks

so would hubby pay any tax for recieving money?

The house was her residence so none due there then.

Shaz

fengirl_2

No, there is no gift tax in the UK.

shaz_mum_of__2

Thanks

seems a bit weird that the person giving the money away gets taxed

Thanks again

Shaz

dzug1

shaz_mum_of__2 wrote: »

Thanks

so would hubby pay any tax for recieving money?

The house was her residence so none due there then.

Shaz

No tax to pay on receipt of money.

If the trust aspect leads to tax being due (and I've no idea if this could be the case) then the trust would pay it before handing it over.

fengirl_2

The person giving the money away does not get taxed - its the estate which pays the tax.