Help with IHT205 form and gifts

Scott_HKR

Evening all, a little advice on filling in the IHT205 form and how to declare gifts.

My dad is applying for probate for his father, who has a remaining estate of around £70,000.

In 2014, my dad was given around £6000 by his father as a gift and £5000 to put away for future funeral costs, as the signs were at this stage that most of his father's finances would be used to fund living costs due to moving from owned home into residential care. As the years went on, whilst there was some money spent on care, he did receive continuing health support due to illness, resulting in this estate being there now. My dad is the only beneficiary in the will and the executor so is now applying for probate to deal with the estate.

My query is do you combine the two amounts in 2014 into one "gift" or separate them out due to their differing natures? Also, would you list the gifts as the full value or take into account the tax-free deductions (£3000? We are a little woolly on how this part works). Also, how much detail are you required to go into when describing these gifts?

I want this to process to be as straight forward for him, so any help would be greatly appreciated. Thanks guys

SeniorSam

The £6000 could be the two tax years. The one in the preceding year is allowed. The second £5000 for funeral costs is hardly a gift but an amount he wanted for his own funeral costs. Just enter the £6000 as £3000 for the year it was given in and £3000 for the preceding year and all will be OK. It hardly matters as his estate will not be subject to IHT and this is what gifts are counted against, so don't worry.

Scott_HKR

SeniorSam wrote: »

The £6000 could be the two tax years. The one in the preceding year is allowed. The second £5000 for funeral costs is hardly a gift but an amount he wanted for his own funeral costs. Just enter the £6000 as £3000 for the year it was given in and £3000 for the preceding year and all will be OK. It hardly matters as his estate will not be subject to IHT and this is what gifts are counted against, so don't worry.

Thank you for the reply, are you saying he should leave the funeral costs off the form altogether, and list only the gift as a split amount?

He worries a lot and was LPA at the time so wants to ensure everything is recorded correctly.

Mojisola

Scott_HKR wrote: »

My dad is applying for probate for his father, who has a remaining estate of around £70,000.

In 2014, my dad was given around £6000 by his father as a gift and £5000 to put away for future funeral costs

Depending on which companies hold the money, you might not need probate.

Have any of the companies refused to release the money to your father?

Scott_HKR

Mojisola wrote: »

Depending on which companies hold the money, you might not need probate.

Have any of the companies refused to release the money to your father?

All of his money is in two bank accounts, with the same bank. He is going at the weekend to do what he needs to do with the bank (I'm guessing the account gets closed) although we just assumed he'd have to apply for probate with it being £70,000?

Mojisola

Scott_HKR wrote: »

All of his money is in two bank accounts, with the same bank. He is going at the weekend to do what he needs to do with the bank (I'm guessing the account gets closed) although we just assumed he'd have to apply for probate with it being £70,000?

It's always worth asking - different companies have different rules.

It's a shame it's all with one bank.

Keep_pedalling

Scott_HKR wrote: »

All of his money is in two bank accounts, with the same bank. He is going at the weekend to do what he needs to do with the bank (I'm guessing the account gets closed) although we just assumed he'd have to apply for probate with it being £70,000?

You are almost certainly going to need probate, I don’t think any banks have limits that high where they will pay out without it.