Do monetary gifts have to be physically transferred before death to count as a gift/surplus income?

xylophone

My mother, who has died, had a saving account (in her name only) 

This is the important point - the fact that you had access (how?) would not make it any less an account in her sole personal name  to which she had untrammelled access.

If your mother had made regular gifts within the gift allowance/as documented gifts from surplus income to your/your wife's accounts then they would not have been subject to IHT.

badger09

sirbb said:

Do monetary gifts have to be physically transferred before death in order to count either as a gift or as "surplus" to income?

............................

Yes

Dox

sirbb said:

Presumably if she had transferred the money across to me prior to her death and it's all either came under the annual gift relief or else gifted as excess incomeetc, it would not be subject to IHT? 

Correct - but she didn't. Whether you had access to the account is irrelevant in the eyes of HMRC. She still owned the funds.

Mojisola

You don't have to answer because it's only curiosity but why did she keep the money in her account rather than giving it to you?

Dox

Mojisola said:

You don't have to answer because it's only curiosity but why did she keep the money in her account rather than giving it to you?

To take advantage of the tax-free interest allowance would be my guess.

sirbb

Exactly that.

Keep_pedalling

sirbb said:

Exactly that.

Which makes it a slam dunk, she was always the beneficial owner. 

xylophone

Which makes it a slam dunk, she was always the beneficial owner. 

Exactly so.

sirbb

Thanks everybody.

Savvy_Sue

Having said that, have you checked size of estate and value of house and who it's bequeathed to and whether there's any nil rate transferable band and the new exemption for house going to direct descendants?

And is a deed of variation helpful?