Inheritance Tax rules 6 June 2022 at 9:13AM in Cutting tax 6 replies 111 views

nalayak

I have 4 children and have recently given each £120,000. Two of them live abroad, 1 in Oz and the other in the US. Does the 7 year rule apply in these 2 cases?

diystarter7

Yes it applies to you not them. Different rules may apply to them but the 7 year rule applies to you.

nalayak

I'll be dead!

westy22

Your estate (which is technically the HMRC's creditor) lives on beyond the grave

nalayak

Thanks. What happens when my estate is insufficient to pay any IHT due?

Keep_pedalling

As your gifts exceed your NRB there could be a call on those gifts for IHT purposes should you not survive 7 years. This is only really a problem if you have given so much away that your residual estate does not have the funds to meet the tax bill. Taper relief will also apply to the part of the gifts that took you over £325k

For the sake of your executors, please make sure you document these and any other gifts and keep a copy with your will.

diystarter7

If the OP died pennilessly and their estate could not meet the tax payments, will HMRC chase those gifted to in the uk and or abroad? I'm guessing they may do depending on if it was worth their while.