A gift or part of the estate

K_potts

My fathers will left my sister and I as main beneficiaries with his partner receiving a relatively small amount of cash and is  able to live in a downsized purchased property that we hold in trust for her remaining years.  When dads health declined In his final months he could no longer drive and he part exchanged his car in for an easier to access vehicle his partner drove him in costing him around £10k. He purchased it In his partners name which she continues to use and never stated what he wanted us to do when he passes, he had been very clear about everything else. My sister thinks it forms part of the estate and the value deducted from her final cash inheritance and I think it should be classed as a gift and reported as such as he didn’t specify either way. Not sure how to resolve this one?

Keep_pedalling

A car can have seperate owners and registered keeper, however unless There is evidence to the contrary this sounds like a gift or something purchased as a joint asset so is not part of his estate.

Your father sounds like he had his affairs pretty much in order, and putting the car in his partners name would make things simpler for her after he died. If he wanted you and your sister to inherit the car he would have left instructions to that effect.

K_potts

His illness affected his cognitive functions towards the end so I don’t think he was able to consider the purchase practically and rationally if he could it would have been purchased in his name I am sure. As such, I think it must be treated as a gift.

Dox

If it was a gift within the last few months of his life, the value of the car needs to be added to the other assets in the estate. It falls under the 7 year rule: https://www.gov.uk/inheritance-tax/gifts

You can't deduct it from his partner's inheritance if she's been left a specific amount of cash. 

K_potts

Yes that’s what I thought too and added to gifts form, my sister thought it should fall in the estate ie. ours and be added to the inventory and say to partner the car is part of the estate if you want it you can have it and we will reduce your cash payment accordingly 

Robert_McGeddon

I think Dox is technically correct.

However, as she used it for your father's benefit during the last days of his life then if it were me I wouldn't pursue it. If she loved and cared for your Dad it just wouldn't feel right. If she hadn't driven your Dad around what would he have done? Hired a carer and car? Financially, gifting a car now worth maybe £6-7K may have been the cheaper option anyway.

K_potts

I agree, thank you

Brynsam

Butby said:

Yes that’s what I thought too and added to gifts form, my sister thought it should fall in the estate ie. ours and be added to the inventory and say to partner the car is part of the estate if you want it you can have it and we will reduce your cash payment accordingly 

Suggest you tell your sister to stop money grubbing (perhaps not phrased quite so robustly!) and be grateful your father's partner looked after him so well in the last months of his life.

K_potts

appreciate the comment but she’s not money grabbing she’s just interpreted the situation differently and is trying to protect our late mothers legacy - to be fair my Dad had asked us both which one of us will have his car before he made his swap 🙂