Mum gifting £180K

Shockedballoon_3

My mum has sold her house and moved into a retirement flat. She, very kindly, wants to give us the remaining £180K proceeds towards our house move.
She'll be left with ~£42K savings and her flat cost £41.5K.
Obviously she is not planning on popping her clogs just yet, but if she did within 7 years would we have to pay inheritance tax on it? Or any other form of tax?

xylophone

The gift would be a PET for IHT purposes but it would appear that IHT will not be relevant as her total estate seems to be below the threshold.

Should your mother require means tested benefits or care at any point, there could be a question of deprivation of assets.

https://www.gov.uk/inheritance-tax/overview

http://www.which.co.uk/elderly-care/financing-care/gifting-assets/343063-what-are-the-rules-for-gifting-assets

CLAPTON

Shockedballoon wrote: »

My mum has sold her house and moved into a retirement flat. She, very kindly, wants to give us the remaining £180K proceeds towards our house move.
She'll be left with ~£42K savings and her flat cost £41.5K.
Obviously she is not planning on popping her clogs just yet, but if she did within 7 years would we have to pay inheritance tax on it? Or any other form of tax?

the current IHT allowance is 325,000 : so if her total estate including the gift is less than that then no IHT would be payable

if her estate can benefit from her husbands allowance then no tax up to 650,000

[Deleted User]

The estate would be liable, not you. However if her total assets are £42000 savings, a £41500 flat and the gift of £180000 there is nothing to worry about in any case as this is less than £325000.

Shockedballoon_3

Thanks all! Pretty sure estate would be under £325K. However thanks xylophone for the info re: deprevation of assets. Not something that had occurred to me - may well be relevant.

Mum is relatively well considering, but has a condition that puts her at a higher risk of stroke (atrial fibrillation). One of our motivators in buying a bigger house is to have potential ground floor annexe type accommodation for mum should she need some semblance of care in the future. For now she is determined to be as independent as she can for as long as possible, hence her buying a warden controlled flat in her hometown rather than 70miles away near us.