£3000 allowance - confused

Pinnypinpin

Sorry if I'm being dense, I'm still feeling upset by the loss of my loved one and struggling to think straight... I am executor and sole beneficiary of my cousins estate. It will be around £300k, including many cash gifts she has given to me over the past 3 years, which amount to around 86k. im still trying to get my head around the annual allowance of £3000. Can I apply that every year she gave me cash? As far back as March 2014.

da_rule

It can be applied in any year gifts were made that would now be chargeable to inheritance tax. Where the full amount wasn't used the previous year it can be rolled over up to a maximum of £6000.

Was your cousin married at all?

getmore4less

if the total including the gifts is £300k there will be no IHT so it won't make any difference.

if you mean £300k + £86k you may want to look at all opportunities to get some exempt gifts

securityguy

"It will be around £300k"

So why are you concerned about IHT?

da_rule

securityguy wrote: »

"It will be around £300k"

So why are you concerned about IHT?

D'oh. I misread the question as £300k plus the £86k in gifts.

Obviously if, even with the gifts the value is only £300k there is no IHT so the £3000 gift relief doesn't matter.

Keep_pedalling

You actually have 4 years of allowances, as the allowance from 2013 can be carried forward to 2014.

Pinnypinpin

da_rule wrote: »

It can be applied in any year gifts were made that would now be chargeable to inheritance tax. Where the full amount wasn't used the previous year it can be rolled over up to a maximum of £6000.

Was your cousin married at all?

She was widowed.

da_rule

Pinnypinpin wrote: »

She was widowed.

Ok, and did her deceased partner leave everything to her?

If so, her nil rate band will be £650,000 for inheritance tax, so you really don't have to worry.

Linton

Can you show that her gifts were made regularly out of income? If so they would not be considered part of her estate and so not liable to IHT.

Keep_pedalling

Linton wrote: »

Can you show that her gifts were made regularly out of income? If so they would not be considered part of her estate and so not liable to IHT.

Highly unlikely that anyone would have nearly £30k of spare income pa, but even if some of the gifts given were from income, it is not worth complicating the issue when it appeared the estate is well below IHT territory..

Pinnypinpin

Yes, her husband left everything to her, but I have no records of that, just what she told me. I don't think they had much and lived in a small flat but my cousin inherited from her father 3 years ago which is why she has a chunk to leave to me, plus the flat. I'm getting close to the threshold in my calculations now, so including the nil rate band would be good.