Making A Gift

woodbine66

Just a basic question. My sister is 64 and wants to give some money to her son. About £40,000 I believe. This may count as a gift with HMRC in the future and I have to say that my sister is not in the best of health. If she wants to make this gift does she have to fill a form in or put anything in writing? Or just sign the cheque? Presumably this will have to be disclosed in any IHT form for her estate in the future?

Thanks for any advice.

xylophone

Is your sister's estate likely to fall into IHT territory?

She could simply leave a note with her will stating that on (date) she gave her son John Smith an outright gift of £40,000. This will help her exors.

I suppose one should sound the usual warning about deprivation of capital as you state that your sister is  elderly and not in the best of health.

Is it likely that she would need means tested residential care? Is the £40,000 over and above what she is likely to need?

getmore4less

If the gift is made with the primary reason to reduce any IHT liability that can help protect from the deprivation issues.

I would check the available nil rate bands, it is likely to be between £325k and £1m depending any deceased spouse estate and property ownership now or in the past.