gifting ~ getting taxed heavily?

Pink_Flamingo

Hi everyone,

Please can anyone give some advice? I understand, but just from what I have read on the internet so far, that if one of your parent's estate is less than £325,000 then you don't have to pay inheritance tax when they die (?). But what if you were given a small fraction of that about 7 years ago as a hand-up to try and get on the property ladder ~ the HMRC seems to call this 'gifting'? ~ although I am still not able to get on the ladder ) but one of your parents dies in the last 6 months, how much tax do you have to pay? So concerned about what this might be and horrified that the government wants people to buy their own homes but is quite happy to take money from them before they can get the chance....

Would so appreciate anyone's advice. Thanks very much in advance.

xylophone

http://www.hmrc.gov.uk/inheritancetax/intro/basics.htm



See also http://www.hmrc.gov.uk/inheritancetax/pass-money-property/exempt-gifts.htm

and http://www.hmrc.gov.uk/inheritancetax/how-to-value-estate/gifts.htm

John_Pierpoint

Make sure that you don't fall into the misconception that the IHT due tapers off over 7 years, it almost certainly does not in your case. If the donor survives only 6 years and 364 days then it is bad luck, but as with other examples of bad luck, you could insure against it.

Generally speaking the gifts are deducted from the £325k allowance so it is those inheriting the residuary of the state that get to pay the tax.

Pink_Flamingo

Thanks very much to both of you for your helpful replies. So sorry for the delay in getting back to you ~ i have been having problems logging into the forum, but it is working today thankfully!

CLAPTON

Pink_Flamingo wrote: »

Thanks very much to both of you for your helpful replies. So sorry for the delay in getting back to you ~ i have been having problems logging into the forum, but it is working today thankfully!

always better to give little more information about your circumstances as it will get better replies.

e.g. are both parents alive?
how much is their estates likely to be worth
how much are they thinking of gifting
or what?