Gifting and Inherittance Tax

mackemdave

In June my Mum died...Today,I have just found out that in Dec last year my Mum, on the advice of my sister, gifted her two grandchildren £30,000 each.This was done as there was a possibility that Mum was going to have to go into residential care.
As I said I knew nothing of this and would have been totally against it If I had known

Mums estate minus the £60,000 is around £40,000.My question....Is there going to be tax payable on the gifts seeing as Mum didnt live for 7 yrs after the gift?

antrobus

mackemdave wrote: »

...My question....Is there going to be tax payable on the gifts seeing as Mum didnt live for 7 yrs after the gift?

Not on the facts given. The estate is well below the threshold for IHT even including the gifts.

CLAPTON

inheritance tax starts on estates over £325,000 (or £650,000 if her husbands allowance can be utilised )

Poppy9

Is the real issue the gifts to the grandchildren being more substantial than your inheritance and was this your mother's intention or did she think it was still her money it was just lodged with her grandchildren?

I only ask as about 15 years ago MIL gave DD (then a toddler) a couple of grand to put in her savings account but it turned out she still viewed it as "her" money i.e. every birthday/xmas she asked DD what she wanted then told us to buy it from the money in the account!!

mackemdave

Poppy9 wrote: »

Is the real issue the gifts to the grandchildren being more substantial than your inheritance and was this your mother's intention or did she think it was still her money it was just lodged with her grandchildren?

The issue is that the gifts were only known to my sister...as was the changes made to Mums will last year....In Mums former will I had been appointed executor....agreeed by all the family...along with a person from HSBC bank.Last year unbeknown to myself and brother Mum changed her will and appointed my sister as exec...It was only on Mums death that this has come out....

Poppy9

So are you saying your mother's will was made not freely but under duress by your sister?

The grandchildren who benefited, are they your sisters children?

troubleinparadise

Possibly taking the HSBC executor out of the equation was in your mum's best interests (or the cost to her estate); but certainly the gift was in your sister's childrens' best interests.

Had your mum needed to move to a care home and be funded by the state, a financial assessment would have brought to light those gifts and probably been regarded as deliberate deprivation of capital - there is no time limit on how far back that financial assessment goes. So whilst your mother or sister may have felt it was a clever ploy to avoid using your mother's savings to pay for care it would have been discovered. (Perhaps what is sadder is that your mother would have been able to afford a better quality of care from her money for her brief period than that offered by state funding at the LA rates - but I guess that wasn't high on the list of priorities.)

Your sister and mother have certainly been somewhat secretive with regard to informing you, but I have to assume your mum was willing to make these will changes and gifts.

Sadly I suspect that your relationship with your sister will have suffered as a result of all this.