Iht ?

castle96

My estate is left to 3 children A/B/C, 1/3rd each. IHT will be payable.
If I were to gift say £100k to A, now (nil to others now) and die now (ignore exemptions, etc), how would IHT be calculated at death ?
Would the estate pay the total IHT then they get 1/3rd each, or would A pay 'extra' on the £100k

p00hsticks

I'm not an expert but as far as I'm aware, IHT will be calculated on your remaining estate as at the time of your death plus the £100k.

Your remaining estate - less IHT - would then be divided equally between A B and C.

So A will end up £100k better off than B and C

Floccinocci

The £100k gifted to A would would reduce your nil rate band by £100k to £225k as you had died within 7 years of the gift. Your estate would then be calculated with your remaining assets in the normal way, except you would only get £225k nil rate band to reduce the estate value. This would benefit A as they would have no IHT to pay on the £100k you gave them.

Linton

Inheritance rules and inheritance tax rules are different. Prior gifting does not affect inheritance, but does affect tax. Tax applies to the estate as a whole and not to the individual bequests. If you wanted A's inheritance to be reduced by any extra tax arising from the gift you would have to explicitly specify that in your will.