Inheritance Tax

Albermarle

Then again if they have assets in access of £1m the point may be moot as they are less likely to need council assistance and therefore less likely of there to be considered deprivation of assets.

Yes, if you pay for your own care, then the council has zero interest in your financial affairs. 

BR5500

Sorry to ask what might seem an obvious question, but if the current married couple threshold is £1m and a gift of £23k is made now, would the current IHT threshold of £1m apply if the gifter passes in say 5 years or would the IHT threshold of 2029 apply?

Basically, if the IHT threshold is reduced in the future, could this potentially mean that a gift made now could be drawn into IHT in the future, even though the current total value of the estate (including the gift) is well below the current £1m nil band allowance? This is assuming the parent who made the gift does not live another 7 years.

eskbanker

BR5500 said:

Sorry to ask what might seem an obvious question, but if the current married couple threshold is £1m and a gift of £23k is made now, would the current IHT threshold of £1m apply if the gifter passes in say 5 years or would the IHT threshold of 2029 apply?

Basically, if the IHT threshold is reduced in the future, could this potentially mean that a gift made now could be drawn into IHT in the future, even though the current total value of the estate (including the gift) is well below the current £1m nil band allowance? This is assuming the parent who made the gift does not live another 7 years.

The latter, and yes, respectively.

Albermarle

Basically, if the IHT threshold is reduced in the future,

Although this seems highly unlikely, as it reduces each year in real terms due to it not increasing with inflation for many years

Keep_pedalling

Any reduction in the available transferable NRB is based on the percentage of the NRB on the first death applied to the rate in operation at the time of the second death.

For example, if I die with £32,500 of non-exempt gifts made within the previous 7 years my spouses’ estate would only have 90% of the TNRB available, so if it had been reduced to £200k it would leave £180k available. If it had been increased to £500k then £450k would be available.