We're aware that some users are experiencing technical issues which the team are working to resolve. Thank you for your patience.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!

Iht and gift of cash

Options
Have a question in this scenario

Daughter gives mother 40k cash in 2020
Mother uses that 40k gift to purchase a house for 650k. The rest of the 610k cash came from mother's savings and a previous house she sold.

Daughter moves in with mother in 2020 to new property.
Mother dies in 2022 , is there any tax implications because of the 40k given to mother , which daughter also benefits from by living in the house?

Comments

  • Keep_pedalling
    Keep_pedalling Posts: 20,647 Forumite
    Tenth Anniversary 10,000 Posts Name Dropper Photogenic
    If the mother’s marital status was single or divorced then the £40k gift would form part of her estate and as the estate is over £500k then will add £10k of IHT to the estate. If she is a widow then her estate could have exemptions up to £1M so may not matter so much. The gift is also still part of the daughters estate so if she dies within 7 years could be subject to IHT x 3.

    If this is a real case then the £40 would be better given as a loan, or the two of them should be joint owners.
  • V2001
    V2001 Posts: 248 Forumite
    Fourth Anniversary 100 Posts Name Dropper
    The property was in mother's sole name and she was a widow. So should it just be left at that and not need to be declared anywhere about the 40k?
    Obviously daughter who made the gift of 40k is still alive 
  • Linton
    Linton Posts: 18,139 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Hung up my suit!
    edited 9 March 2023 at 6:38PM
    The fact that it was a gift would not be declared in any documentation for the mother's estate. OK one exception - if the mother's executors were claiming she was making large gifts from income, then the gift could be categorised as income.

    It may need to be declared when the daughter dies.
  • getmore4less
    getmore4less Posts: 46,882 Forumite
    Part of the Furniture 10,000 Posts Name Dropper I've helped Parliament
    If the mother’s marital status was single or divorced then the £40k gift would form part of her estate and as the estate is over £500k then will add £10k of IHT to the estate. If she is a widow then her estate could have exemptions up to £1M so may not matter so much. The gift is also still part of the daughters estate so if she dies within 7 years could be subject to IHT x 3.

    If this is a real case then the £40 would be better given as a loan, or the two of them should be joint owners.
    The £40k has been spent  no longer part of the estate as cash.
  • Keep_pedalling
    Keep_pedalling Posts: 20,647 Forumite
    Tenth Anniversary 10,000 Posts Name Dropper Photogenic
    If the mother’s marital status was single or divorced then the £40k gift would form part of her estate and as the estate is over £500k then will add £10k of IHT to the estate. If she is a widow then her estate could have exemptions up to £1M so may not matter so much. The gift is also still part of the daughters estate so if she dies within 7 years could be subject to IHT x 3.

    If this is a real case then the £40 would be better given as a loan, or the two of them should be joint owners.
    The £40k has been spent  no longer part of the estate as cash.
    But it was spent on a house so has not left the estate, just the form has changed.
Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 350.7K Banking & Borrowing
  • 253K Reduce Debt & Boost Income
  • 453.4K Spending & Discounts
  • 243.7K Work, Benefits & Business
  • 598.4K Mortgages, Homes & Bills
  • 176.8K Life & Family
  • 256.9K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16.1K Discuss & Feedback
  • 37.6K Read-Only Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.