Advice For My Dad Please

My Dad Has Recently Been Left A Widower, Sadly.

My Mum Had A Will Leaving Everything To Him And Then Upon His Death, Everything Equally To Me And My Sister.

Their Affairs Go Something Like This:
House Worth Approx 140 K
Savings Including Peps And Isas And Tessas Worth Approx 160 K

His House And Everything Was Paid Off A Long Time Ago So No Mortgage Debts Etc Etc So He Was Wondering What Best To Do With The Savings With Regards Tax Etc.

He Would Like To Give Me And My Sister Some Money Just Now And Maybe Also His Five Young Grandchildren But What Are The Tax Implications On This?

Any Advice Would Be So Much Appreicated To Him.
Thanks
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Comments

  • Cara79
    Cara79 Posts: 580 Forumite
    I'm not too sure of the answer to your question, but just wanted to convey my condolences for your loss.

    I believe that your father is able to give some money to his children and grandchildren. I think the only tax implication would be if he were to pass away within the next 7 years. The "gifts" would then be accounted for in his estate on which inheritance tax may or may not be due.

    I hope someone will be along soon who can help more on the savings side and confirm / clarify the gifts / tax issue.

    Cara
  • I'm not quite sure how your late mother's wishes can apply here with regard to her will.
    If everything is left to your father - then great - but what if he spends it?
    I'm sure that there is no disagreements here but would recommend that he sees his solicitor to update or re-write his will and an appointment with an IFA to discuss how to minimise Inheritance tax.
    There are tax experts on these boards who can advise better than I but there is a tax allowance every year that your father can use to 'gift' money to you and your sister and grandkids.
    Ensure these are documented somewhere as they are tax free if he survives 7 years from date of transfer.
  • thank you for above replies.

    i don't think he would go on a world cruise but you can never say never but he was thinking of maybe giving me and my sister a 10 K each and the grandchildren 1K each.

    would this be okay to do this without tax implications
  • EdInvestor
    EdInvestor Posts: 15,749 Forumite
    What income does he have, such as pensions? Does he need to invest the savings to provide extra income to cover his living costs?
    Trying to keep it simple...;)
  • he gets a pension of around £ 146 per week but doesnt have much outgoings at all.

    he is nearly 70 and feels that if he gifts this money to us now he will have more than enough savings left.
  • If the gift is documented perhaps in a letter attached to his will and he lives 7 years after he has gifted the money there is no tax to pay.
    Should he not live that long (sorry to be morose) the gift is added back to his estate as if it had never been made (I think there is a sliding scale) to establish whether inheritance tax is payable or not.
  • okay thanks for your help.

    i will pass this information onto him
  • coolagarry
    coolagarry Posts: 1,261
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    Your father can give gifts up to £3,000 in a tax year, tax-free (£6,000 if he made no gifts in the previous year).
    This would reduce the size of his estate on death.
    Making these tax-free gifts is probably the simplest way to reduce his tax bill
    if he has savings that are accessible and surplus to his needs.
    Gifts of over £3,000 a year also become tax-free if he survives for seven years after making them.

    Also see here http://business.timesonline.co.uk/article/0,,9559-2329846,00.html
    I'm Glad to be here... At my age I'm glad to be anywhere!!
    I'm not losing my hair... I'm getting more head!!
  • Sapphire
    Sapphire Posts: 4,269
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    SMARTY29A wrote:
    thank you for above replies.

    i don't think he would go on a world cruise but you can never say never but he was thinking of maybe giving me and my sister a 10 K each and the grandchildren 1K each.

    would this be okay to do this without tax implications

    Yes, this would be OK. I think the threshold for tax would be around £70,000 per person, provided the person is still alive after seven years, but do double-check if you are not sure.

    My condolences to you and your father.
  • thanks for your advice, sorry didnt quite understand when you said tax thresehold is around £ 70,000 per person.

    as i say he is thinking about gifting around 10k to me and my sister and 1 k to 5 grandchildren.
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