Gifting money

Mickey666

Seems a bit pedantic - but the end result is the same.  BTW, I’m not against penalties for those who deliberately dispose of assets in order to claim benefits, but I’d like to see a less subjective system - though I understand it’s fraught with difficulty so perhaps the current system is the best of all the bad options.

Straying a little off topic, perhaps if government would be more accommodating about voluntary euthanasia we wouldn’t have quite so many care home issues in the first place.  Of course, VA is not without its own problems but it seems strange to me that people can be prosecuted for letting a terminal animal suffer by prolonging its life but the law denies people the right to choose for their own lives.  

caprikid1

In terms of deprivation of assets as is stated there is now timescale for which they can go back. Lets be honest if you parents gift you a house you would normally have inherited what other reason can there be ?

Gavin83

Mickey666 said:

sweetsand said:

kingle15216 said:

So because they won’t be above the IHT threshold they can give more than the £3000 per annum then?

Hi OP
No. They can give away 3k each per tax year and if they have not given away anything last tax year they can give away 6k the first time for this and last tax year.  They can also give away as many 250 pound gifts to different people but please read up on that. You can give as many gifts of up to £250 to as many individuals as you want. Although not to anyone who has already received a gift of your whole £3,000 annual exemption. None of these gifts are subject to Inheritance Tax.
As another said, deprivation of assets. I worked with soc services a few years ago and they were hot on people chasing money for care home fees where it had been given away when the person gifting had a good idea they may have gone into a care home soon or a few years down the road.

Btw, IHT thresholds are increasing so you may want to look that up as well


ATB
x

What does 'hot on people' actually mean in practice?   Even if someone has deliberately deprived themselves of their assets, can the recipients of any such gifts be legally compelled to return the gifts?  

They can be taken to court for the money, yes. I’ve seen it happen on a number of occasions, although for the most part the relatives will settle first. It will also likely depend on the amount, they’re unlikely to take someone to court for a few thousand.

I know of one case where the son was gifted everything, including a reasonable sum of money and the house. Parent went into care, son sold the house and used the proceeds to retire. Care fees went up and up until they reached £80k and he was presented with the bill. He was obviously not pleased. Was offered a settlement at a substantially reduced amount, he refused, it went to court and he lost. Ended up having to pay the £80k + legal fees. I understand he had to remortgage his own house and return back to work.

There isn’t technically a 7 year rule although I doubt most councils would go back anywhere near this far. Also if there’s a property as well it’s extremely unlikely to be a problem anyway. Given the circumstances they’re likely safe to gift the money, just be aware there is a small potential for it to become a problem in the future.