Tax on large gifts

GeckoLI

Looking for advice on tax on cash gifts.

My partner has a 100k share of her mums house, although this is not in name, it is only a mutual understanding that when her father died, he wanted my partner to have his half.

The house is going to be sold and my partner will be claiming her half. How can her mum gift this money to her without being taxed?

Thanks.

Mojisola

There isn't a gift tax in the UK so there's no tax to pay at the moment.

Depending on the value of MIL's estate, there may be an inheritance tax bill when she dies but that will come out of the estate.

tyllwyd

Will mum be likely to claim any state benefits or have care fees that need to be paid? If there is nothing in writing, giving away £100K might cause problems for her.

Mojisola

tyllwyd wrote: »

Will mum be likely to claim any state benefits or have care fees that need to be paid? If there is nothing in writing, giving away £100K might cause problems for her.

As Mum will also have 100k from the house sale, she's not going to claiming benefits for quite some time so they should be alright.

People do create problems by this "not in writing but Dad/Mum/Gran wanted x to happen". If that's what's wanted, write it down!

tyllwyd

Mojisola wrote: »

As Mum will also have 100k from the house sale, she's not going to claiming benefits for quite some time so they should be alright. ...

Are you sure? If she needs to buy herself a new home with that £100K, depending on where she lives that might not go far. Or she might be deliberately trying to give away her money knowing that she is likely to go into a home in the near future. The OP hasn't said so I thought it was worth mentioning.

Mojisola

tyllwyd wrote: »

Are you sure? If she needs to buy herself a new home with that £100K, depending on where she lives that might not go far. Or she might be deliberately trying to give away her money knowing that she is likely to go into a home in the near future. The OP hasn't said so I thought it was worth mentioning.

Oh, it definitely is worth mentioning because it's something a lot of people don't consider.

If a deed of variation had been done when the father died, this problem wouldn't have occurred but it could well be a problem for the mother in this case.

GeckoLI

Thanks for the advice all. The mum will not be vulnerable in future and is unlikely to rely on state so there shouldn't be any issues. Further to that, the mum is still working and only in her 50s with accommodation already sorted with her partner.

Mojisola wrote: »

People do create problems by this "not in writing but Dad/Mum/Gran wanted x to happen". If that's what's wanted, write it down!

This is slightly presumptuous considering the exact circumstances. It's easily a black and white solution from a forum user's point of view on the Internet, with no further information regarding the situation to hand. I will not divulge further to just 'some guy' on MSE.com.

Buddy36

Excellent advice Mojisola, remind me to go back in time & tell my dead father to 'write it down'. Was looking for some advice not judgement bearing in mind you don't know the full details of the situation this idea frankly sounds stupid in context.

GeckoLI

buddy36 wrote: »

excellent advice mojisola, remind me to go back in time & tell my dead father to 'write it down'. Was looking for some advice not judgement bearing in mind you don't know the full details of the situation this idea frankly sounds stupid in context.

..........

Mojisola

Buddy36 wrote: »

Excellent advice Mojisola, remind me to go back in time & tell my dead father to 'write it down'. Was looking for some advice not judgement bearing in mind you don't know the full details of the situation this idea frankly sounds stupid in context.

There will be other people reading this thread who are relying on verbal instructions and the advice might help them to get wishes into a legal form before someone dies. The same applies with the mention of DOV - it will help other people.

There was no implied criticism of you or your family.

somethingcorporate

Buddy36 wrote: »

Excellent advice Mojisola, remind me to go back in time & tell my dead father to 'write it down'. Was looking for some advice not judgement bearing in mind you don't know the full details of the situation this idea frankly sounds stupid in context.

Wind your neck in, this forum is not just here for the benefit of you.

Mojisola's advice was good for anyone else that may indeed be faced with this situation in future and whilst it may not benefit you directly it may save someone else a lot of hassle and grief in future.

The OP's mother may be faced with deprivation of assets issues in future because this lack of provision in the will.