When does a gift happen for IHT purposes?

Keep_pedalling

bobster2 said:

PBrie said:

Don't forget that the amount of the gift gets tapered during the 7 years so affects things less over time.

From the gov.uk website...

Taper relief only applies if the total value of gifts made in the 7 years before you die is over the £325,000 tax-free threshold.

Taper relief

Years between gift and death	Rate of tax on the gift
3 to 4 years	32%
4 to 5 years	24%
5 to 6 years	16%
6 to 7 years	8%
7 or more	0%

It's not the gift that gets tapered - it's the tax rate. And as stated there - the taper is only relevant if the total in gifts uses up the NRB (i.e. > £325,000).

And only then for the amount over the NRB

Brie

@Keep_pedalling
NRB??  

Yes I did meant that the tax is tapered, just didn't word it correctly!!

Grumpy_chap

Brie said:

NRB??  

Nil Rate Band

Marcon

theoretica said:

There is a special case for when someone makes a gift, but keeps it in their possession (like cash in the bank but the transfer not made yet) - a 'gift with reservation' which as I understand it does not count for IHT purposes.

The problem is that a 'gift with reservation' DOES count for IHT purposes. See https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm04071

Eighteen

Want to find information on money gift used to help family member to buy property which is now being sold to buy another property. 

So part is mortgaged and rest was gifted.

I am aware of gift rule 7 years sliding scale. Currently at year 4/5.

Don't understand capital gains calculator and if it applies . The property being sold is used as main home. 

Is there anything else to consider?

Thanks

RAS

There is no CGT on disposal of a primary residence.

Keep_pedalling

The sliding scale only applies for gifts above the NRB (£325k) and even then only to portion of the gifts above that level. 

If you have any other questions please start a new thread of your own rather than tag it on to an existing thread.

km1500

could I just ask - is it gifts above 325k or is it gifts above 500k if you have the 175k property addition

Keep_pedalling

km1500 said:

could I just ask - is it gifts above 325k or is it gifts above 500k if you have the 175k property addition

The former.

My_perfect_cousin

A question regarding IHT taper relief on gifts. Apologies if this has just been answered by the previous post. If a gift of cash (let's say £25,000) is made 3 years before a person dies. On the person's death, does the £25,000 gift simply reduce the nil rate band by £25,000 to £300,000? Or is the 32% relevant? Essentially, how does the taper relief work regarding IHT? thanks