Money from parent

Gam2015

So my grandad is wanting to give his children a lump sum each. The question is can he just give them a lump sum or will they be eligible for inheritance tax? 

OldMusicGuy

He can give a total of £3000 each year tax free. Above that, if he dies within 7 years of giving a gift there is inheritance tax due, provided of course his estate is big enough to be subject to inheritance tax.

See https://www.gov.uk/inheritance-tax/gifts

Keep_pedalling

OldMusicGuy said:

He can give a total of £3000 each year tax free. Above that, if he dies within 7 years of giving a gift there is inheritance tax due, provided of course his estate is big enough to be subject to inheritance tax.

See https://www.gov.uk/inheritance-tax/gifts

Even if inheritance tax is due, it comes from the remainder of his estate not from the gifted money unless he has given in excess of his NRB (£325k)

There is no gift tax in the UK so he can give away as much as he likes but beware of the rules on deliberate deprivation of assets in case of means tested benefits benefits or care costs.

OldMusicGuy

Yes, deliberate deprivation of assets is more likely to be an issue if the gifts are large, relative to grandad's savings/assets.

diystarter7

Gam2015 said:

So my grandad is wanting to give his children a lump sum each. The question is can he just give them a lump sum or will they be eligible for inheritance tax? 

OP

Read the government sites re IHT and gifts. Various gifts can be given tax free.

Read 'deprivation of assets and care home fees and benefits.

The sooner he does it the better ie before he knows he may end up needing care/help etc.

Yes, it is wrong those that don't save a penny dont have to pay IHT, care home fees etc etc.