Probate Gift Section

migratingdesktop

Hi,

Quick question in regards to the 'Gifts given away' section on a probate form. The form states:

Did X give gifts away of more than £3,000 in total in any of the 7 years before they died?

What is the definition of a gift? For example if person X bought someone a new phone is this classed as a gift? Or if person X paid a large sum for a holiday that they didn't go on is this a gift? If I am really not sure what person X did 7 years ago would it raise suspicions if I just put 0 for these values?

Thanks for the help

Browntoa

Any cash or equivalent value gift in total (added together) per year over the last 7 years over £3000 , think it excludes gifts for weddings
https://www.moneyadviceservice.org.uk/en/articles/gifts-and-exemptions-from-inheritance-tax/amp


It's for tax purposes

Yorkshireman99

migratingdesktop wrote: »

Hi,

Quick question in regards to the 'Gifts given away' section on a probate form. The form states:

Did X give gifts away of more than £3,000 in total in any of the 7 years before they died?

What is the definition of a gift? For example if person X bought someone a new phone is this classed as a gift? Or if person X paid a large sum for a holiday that they didn't go on is this a gift? If I am really not sure what person X did 7 years ago would it raise suspicions if I just put 0 for these values?

Thanks for the help

These are both gifts and must declared. Don.t lforget the executor will be personally be liable for any error or under declaration plus penalties.Remember that you can backdate a gift to the previous tax so giving a one off. £6,000 allowance. Gifts to individuals of £250 per head, per annum, are exempt.

Keep_pedalling

Yorkshireman99 wrote: »

These are both gifts and must declared. Don.t lforget the executor will be personally be liable for any error or under declaration plus penalties.Remember that you can backdate a gift to the previous tax so giving a one off. £6,000 allowance. Gifts to individuals of £250 per head, per annum, are exempt.

Not nessesarily, if the phone was below £250 and the recipient had no other gifts that year it can be ignored.

Unless the testator has kept detailed records of gifts it is impossible for an executor to know what was purchased for themselves or for other people. If the estate is way below the deceased persons exemptions then I would not worry too much, but I would take a lot more care if IHT needed to be paid or the estate was close to hitting those levels.

Anyone with a sizeable estate should really make life easy for their executors bu keeping records, prefferably kept with their will. We do this and it will take our executors a few minutes to fill this section in, rather than spending days going through old bank statements trying to second guess who things were purchased for.

AnotherJoe

My mums estate was £40k under IHT, i put no against all the past seven years gifts (because it was , eg no gifts over £3k in any one year nowhere near it) and no one queried it. I can imagine if it was a fiver under IHT, someone may have.

In the OPs case, unless the holiday mentioned cost more than £6k for the recipient (eg if the whole holiday was £10k but was for the recipient and the donor, so £5k each) , I'd just put no for each year.

buildersdaughter

You can always ask the Probate Office, but you can look up the definitions of 'gifts' on the deaths section of gov.uk, which I found very helpful, and clear.
What it effectively means is that 'normal' - and they do define that - gift giving doesn't count. So, whilst the phone and the holiday count as 'gifts', it is their value and the 'normality' of the giving that defines whether they are exempt when you are totting up.
And I really wouldn't get too worried - they are looking for people suddenly giving away valuable possessions, not whether a phone was worth £250 or £300. One of the guidelines is whether you maintain your standard of living after giving the gift.
I would broadly say that (assuming you knew the person well 7 years ago) that you would know if they were giving away large amounts of money outside their normal behaviour or family expectations. You could ask their family or close friends, but unless you were aware of them buying something valuable I think you are safe putting 0.
We found the Probate Office very helpful in discussing this.
For instance, grandparents usually paid for an extended family holiday annually. The year before their deaths, they booked & paid as usual, but were unable to go on the holiday. This was counted as 'normal' - but I must add that you should check for yourself.