Income tax on gift

sudi

My father-in-law died?

Thank you.

McKneff

No tax is due on cash gifts so you OH is okay, the only tax he would pay is on any interest it accrued, assuming he was a tax payer.

McKneff

Your post is confusing. You mention

Your father in law

Your mother (or did you mean mother in law)

Your mother in law.

sudi

Sorry I am

CLAPTON

what is her estate worth?

whilst there is no income tax on the gifts, if her total estate is suffcient for inheritance tax then the values of the gifts will be 'added' to the value of the estate for IHT purposes.

sudi

Her only he right?

warwicktiger

Your mother can give each of you (you + OH) £3000 per tax year, and count another £3000 as given in the previous tax year, if the gift was to one of you that means £6K is ok, if separately to you both £12K is ok.


The excess, i.e. either £4,500 or £10500 is potentially liable to Inheritance tax should MIL fail to survive 7 years from the date of gift, if she does survive no tax is due.

No income tax is due on the gift.

The fact that it came from fathers estate over two years ago makes the source irrelevant. With hindsight, within two years of fathers death with the consent of all beneficiaries a "deed of variation" could have been done. This would alter the terms of the will, transferring the Whole £16500 to you with NO potential inheritance tax liability.

I am not a qualified financial advisor, I just know a few things from my previous life of 20+ years working for a life assurance company.
Hope this helps.

dzug1

sudi wrote: »

Her only estate was the property which she sold last year and it was sold for £65,000 which was shared equally between my husband, his sister, niece and herself. My husband had £16,000 which as I said has now been spent. My mother-in-law's share is still intact so he needs to go to probate to gain access to it as he is the eldest son. Is he right?

It's possible that he may be able to get it without probate - depends what limits the institutions it is with apply. Most likely he will need Probate though.

He and his sister (??just the one??)both have the right to apply for probate - being eldest doesn't really make any difference. The Probate Office may insist on a joint application or at least want formal confirmation that one is willing to stand down.

And on the figures you have given there is NO Inheritance tax liability

xylophone

https://www.gov.uk/wills-probate-inheritance/if-the-person-didnt-leave-a-will
https://www.gov.uk/wills-probate-inheritance

ceeforcat

warwicktiger wrote: »

Your mother can give each of you (you + OH) £3000 per tax year, and count another £3000 as given in the previous tax year, if the gift was to one of you that means £6K is ok, if separately to you both £12K is ok.


The excess, i.e. either £4,500 or £10500 is potentially liable to Inheritance tax should MIL fail to survive 7 years from the date of gift, if she does survive no tax is due.

No income tax is due on the gift.

The fact that it came from fathers estate over two years ago makes the source irrelevant. With hindsight, within two years of fathers death with the consent of all beneficiaries a "deed of variation" could have been done. This would alter the terms of the will, transferring the Whole £16500 to you with NO potential inheritance tax liability.

I am not a qualified financial advisor, I just know a few things from my previous life of 20+ years working for a life assurance company.
Hope this helps.

With respect, I do not think that the opening paragraph is correct. The limit is £3000 per donor i.e. in this case, your mother can gift a total of £3000, NOT £3000 to each person.

John_Pierpoint

This sounds like an intestacy (no will) but the procedure for obtaining "Letters of Administration" rather than "Probate" is much the same.

http://www.which.co.uk/money/retirement/guides/applying-for-probate/how-to-apply/

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