Being Gifted 40k what are the Tax implications?

James,_Oxford

Raywolfe

My understanding based on section 199 IHTA (and section 204(8)) is that if there is any IHT to pay it is the transferee who is primarily liable and the PRs are secondarily liable. The attached pages from the Revenue's manual sums up the position nicely.

Form! You sound like a policeman.

IHTM30042 - Liability on potentially exempt transfers (PETs): priorities


The legislation does not specify any order of priorities between the different categories of persons liable under IHTA84/S199(1)(b), (c) and (d). However the legislation does make the liability of those persons primary and that of the personal representatives ( IHTM30043) under IHTA84/S199(2) secondary.

You should treat the following persons as primarily liable:

• the transferee ( IHTM30051)

or

• where the property was settled by the transfer, the trustees.

Where there are indications that there may be difficulties in collecting from the transferee or trustees (e.g. where the transferee has dealt with the property given, or is out of the jurisdiction, or the settlement has been wound up and the trust property distributed), you should consider whether, exceptionally, any other persons may be liable under IHTA84/S199 (1)(c) and (d) and, if so, take early action to collect from them.

IHTM30043 - Liability on potentially exempt transfers (PETs): recourse to transferor's personal representatives


The personal representatives ( IHTM05012) of the transferor are liable under IHTA84/S199 (2), but in view of IHTA84/S204 (8) they are liable only to the extent that either

• because of IHTA84/S204 (2), (3) and (5) no person is liable for the tax (or part of it) under IHTA84S199 (1)(b), (c) and (d)

or

• the tax remains unpaid twelve months after the end of the month in which the death occurs.

IHTA84/S204 (2), (3) and (5) are limitations of liability provisions. The liability of the personal representatives is subject to the standard IHTA84/S204 (1) limitation ( IHTM30032).

The circumstances in which recourse to the transferor's personal representatives is likely are

• <LI class=filledcircle>where the tax on the value transferred exceeds the value of the asset received by the transferee ( IHTM30051) (e.g. the transferee receives a small minority holding of unquoted shares ( IHTM18131), but the value transferred on the loss to the estate ( IHTM04054) basis is considerably greater)
• where recovery cannot be obtained from the transferee.

RayWolfe

OK clever clogs, let me put this another way.
In the UK the vast majority of IHT settlements come from the estate not from persons receiving gifts prior to death.
If you don't understand that this forum is to assist most people with most common situations then you are better off running your business than complicating simple issues here.
But thanks anyway, I'm sure we are all stunned by you brilliance and wish that you go far meanwhile, CLAPTON'S immediate reply to the OP will suffice for all but a tiny minority of cases.

James,_Oxford

It's nothing personal Raywolfe.

This forum is about giving people good advice. Anyone who receives a gift which is a PET for IHT purposes needs to know that they are primarily liable for any IHT, it is as simple as that.

RayWolfe

James,_Oxford wrote: »

Anyone who receives a gift which is a PET for IHT purposes needs to know that they are primarily liable for any IHT, it is as simple as that.

.......... really?

Lokolo

James,_Oxford wrote: »

It's nothing personal Raywolfe.

This forum is about giving people good advice. Anyone who receives a gift which is a PET for IHT purposes needs to know that they are primarily liable for any IHT, it is as simple as that.

No it isn't. Its a discussion forum, not advice forum.