Tax implications of 30k gift

Bonbon54

Am I  correct that if the person dies within 7yrs of giving the cash gift then it will become liable for tax. How is this tax paid? Does it become part of the deceaseds estate and paid from that, or does the person who received the gift  have to pay it? 

Jeremy535897

An outright cash gift of £30,000 to an individual (other than to a spouse or civil partner, which is exempt) can only be subject to inheritance tax if the donor dies within seven years of the gift and the donor has also made earlier non-exempt gifts, within seven years of death, that use up the current nil rate band of at least £325,000, plus any residential nil rate band available.

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This might help you.

The gift of 30k is a potentially exempt transfer, and depends on other factors, see below

Clipped from Moneyhelper.org

What is a Potentially Exempt Transfer?

A Potentially Exempt Transfer (PET) enables an individual to make gifts of unlimited value which will become exempt from Inheritance Tax (IHT) if the individual survives for a period of seven years.

If you don’t survive the gift by seven years, the PET becomes a Chargeable Consideration, and is added to the value of your estate for IHT. If the combined value is more than the IHT threshold, IHT may be due.

Any lifetime transfer that is Potentially Exempt must meet certain conditions subject to certain exceptions. The transfer is a gift made by an individual to another individual or to a specified trust. This means, for example, the gift cannot be made from or to a corporation or company.

For example, if a gift of £400,000 is given:

1. The gift will initially use up the available NRB of £325,000 (oldest gifts are attributed first).
2. The remaining £75,000 on death is then subject to IHT (in addition to IHT on the estate).
3. If the remaining £75,000 was given over three years before the death, taper relief may apply.
4. For example, if the whole gift was made between three and four years before the death, the tax charge on the £75,000 would be 32%.
5. So IHT due on the PET would be £24,000.

Albermarle

Bonbon54 said:

Am I  correct that if the person dies within 7yrs of giving the cash gift then it will become liable for tax. How is this tax paid? Does it become part of the deceaseds estate and paid from that, or does the person who received the gift  have to pay it? 

Is the person giving the gift , likely to have to pay inheritance tax on their estate when they die ?
If not then there is no issue with tax on any gifts .
If they are likely to pay inheritance tax then the previous posts/comments apply.

Separately if the person was to need care in the next few years and was looking for the local council to help with costs . The council may well say the £30K gift was deliberate deprivation of assets and refuse to help with costs .