Clarification on gifting inherited money please

Eigna22

Hello everyone.

I know about the £3,000 gifting etc but would like clarification/confirmation on gifting larger sums.
I recently inherited a larger sum of money from my sister in law when she died.
I would like to share it with my daughters. 
Am I correct in thinking that I can give them a lump sum each (i.e.£20,000) and that they would only have to pay inheritance tax on it if I die within 7 years?
Thank you in advance.

sammyjammy

That is correct and inheritance tax would only be due if the size of your total estate after allowances was due for IHT.

As you've posted on the benefits board about this I'd just point out that it could imact on any benefits you or they are receiving.

Samantha

Keep_pedalling

Eigna22 said:

Hello everyone.

I know about the £3,000 gifting etc but would like clarification/confirmation on gifting larger sums.
I recently inherited a larger sum of money from my sister in law when she died.
I would like to share it with my daughters. 
Am I correct in thinking that I can give them a lump sum each (i.e.£20,000) and that they would only have to pay inheritance tax on it if I die within 7 years?
Thank you in advance.

They would never have to pay IHT on that gift, any tax due would come out your residue estate, and only then if your estate exceeded your nil rate bands. If your estate is likely to big enough for IHT to be an issue, then you could do a deed  of variation which avoids your gifts ever becoming part of your estate. This would have to be done within 2 years of your sister’s death.

Although it avoids IHT it could still be classed as deprivation of assets as far as benefits are concerned.