Can my Aunty give me early inheritence

happyharry47

Ji I have an auntie who wants to give me some inheritence early approx £40,000 what are the implications please ? Can we just open an account with it do I have to pay tax on it ? Her total estate is under the £325,000 and she doesnt own her own house either.  Many thanks in advance

MorningcoffeeIV

She can't give you early inheritance, as inheritance involves her no longer being alive, but she can gift you money.

You don't pay any tax on gifts, but if she dies within the next seven years, it may be (in part) treated as still being part of her estate at the time. 

Brie

There may also be implications if she needs assistance paying for care at some point.  The council "may" come to you to help out as she would be considered to have caused deprivation of assets.  

But no tax involved as a gift if there's never going to be IHT.  You may want to get a letter from her to state she is gifting you the money in case the bank questions it's origins and suggests your trying to onshore ill gotten gains from some nefarious industry.

Jowwie

If she were to go into care the local authority might consider this deliberate deprivation. Think there is no time limit that they can go back looking for this. Not an expert here though.

Brie

Jowwie said:

If she were to go into care the local authority might consider this deliberate deprivation. Think there is no time limit that they can go back looking for this. Not an expert here though.

Agree.  It may depend on the council and how long until the care is needed.  If the OP is 20 and the wealthy aunt just 30 then the council is unlikely to know about this if care is needed a few decades into the future.  If however the OP is 60 and aunt 90 it is more likely to be easier to trace.

happyharry47

hi thanks for answers, My aunty is 86 and im 48. So if she needed care they could then just class the £40,000 in her assests or is there bigger legal issues thinking that she is trying to pull a fast one ? Also a £40,000 gift does that involve me being taxed now.  thanks for your wonderful answers everyone they are helping :-) 

Jowwie

Thinking on, I'm wondering if the care home funding is going to become less of an issue with the new funding rules later this year. If there is an £86k cap on social care perhaps such gifts would be ok so long as £86k remains in auntie's funds?

happyharry47

Jowwie said:

Thinking on, I'm wondering if the care home funding is going to become less of an issue with the new funding rules later this year. If there is an £86k cap on social care perhaps such gifts would be ok so long as £86k remains in auntie's funds?

she will still have over £100k she is paying also for her husband at the moment in a carehome

theoretica

The £86k cap is often misinterpreted - it is for care only.  Doesn't include things like somewhere to live, food, heating, though her pension may be able to cover these. 

Jowwie

Are all the funds all hers or are they joint funds with her husband?  Again not an expert, but I think the new funding cap would not apply to someone who is already in care.

Deliberate deprivation would also apply for her husband.

happyharry47

Jowwie said:

Are all the funds all hers or are they joint funds with her husband?  Again not an expert, but I think the new funding cap would not apply to someone who is already in care.

Deliberate deprivation would also apply for her husband.

currently joint.  She has paid £4,000 a month for the last 2 years for his care.  He is 92 with dementia.