Rules relating to Money Gift

Treelock

Hello,

My partners grandmother recently died and passed her estate to my partners parents. The bulk of the estate is tied up in grandmothers house which they plan to sell. Once sold the parents want to give my partner and her sister £40,000 each.

Could someone please explain if there are any inadvertence tax or capital gains tax liabilities or advise on what the most efficient way to transfer the money would be. Ideally we would like it transferred all in one go but if it saves us tax liabilities then we might be interested smaller transers say over 2 or 3 years.

Regards

TL

getmore4less

There is no gift tax in the UK.

Under extreme circumstances there is a small risk of becoming liable for a future inheritance tax liability during 7 years.

Very unlikly since it requires significant previous gifts.

Mojisola

As there is a will, your partner's parents could do a deed of variation and alter the will so that a proportion of the value of the house is inherited directly by the sisters.

John_Pierpoint

.......That change to the will can cost several hundred pounds, but might be worth doing as there is £80k involved and it makes it
absolutely clear what has happened.

InHeritance Tax (IHT) at 40% starts for assets (minus liabilities) over £325k (£650k for a couple) should this look like being a problem for your parents' estate, then doing a deed of variation for the will may well be a good idea in financial - tax saving grounds alone.