Gifting and inheritence tax

thriftytwosome

My husband, who has since sadly died, gifted £70000 to our son 4 years before his death. Most assets were in our joint names so his actual estate for probate was £200000 so no Inheritance tax to pay.

Has that gift now disappeared regarding Inheritance tax as Probate has been granted, or is an amount taken from my husband’s Inheritance tax threshold that passes to my Estate on my death? Does tapering have any affect? I'm confused and would very grateful of comments.

Keep_pedalling

The gift reduces the amount of transferable NRB by 21.54%. Because the gift was well below his NRB tapering is not allowed. Assuming you own a house worth at least £350k, then your estate would need to exceed £930k before this would actually have an impact on your estate.

Did the gift come from a sole account or a joint one? 

thriftytwosome

Thank you Keep_pedalling, The gift came from a joint account. Does that make a diiference?

Keep_pedalling

Yes, It is a joint gift so it only reduces the transferable NRB by £35k. Actually it could be less than that. If he did not use up his annual £3k allowance that can be deducted and if the previous year’s allowance was also not used that can be deducted as well, so it could be as low as £29k.

The same applies to your half of the gift if you unfortunately don’t survive the full 7 years.

It is worth documenting this and letting your executors know where you keep your gift records.

thriftytwosome

Thank you Keep_peddaling,  I'll make sure that's recorded and check the annual allowances too.