Is this counted as a gift....?

theoretica

It seems clear the £60k was a gift - the question of whether it was to his daughter or his ex-son-in-law is almost certainly irrelevant for IHT purposes.

bobster2

sheramber said:

Robbo33 said:

Hi, I'm pretty sure I know the answer to this but wanted to check with some MSEs! Thanks in advance. 

My Dad passed in June 2024. His estate is In August 2019 (so within last 7 years) he gave £60k to my sister's soon-to-be ex-husband, to allow him to pay off the mortgage on the house he shared with my sister. (The house was in his name only). After that, the deal was that the ex would 'sign the house over' (not sure how this happened) to my sister. Done and dusted. 

So, my question is, does that £60k count as a gift? I'm thinking yes. It was not a loan, of any sort. It was given freely, on the understanding that the ex would use it to pay his mortgage off then 'give' the house to my sister. I don't know what, if any paperwork exists relating to this 'deal' - all I know is that it happened, and now my sister owns her house outright.

Dad's estate is worth over £500k so will be liable to pay IHT - the £60k will of course be part of the £500k allowance and mean that we only have £440k allowance left before we enter IHT territory.

Have I got that right...? Any thoughts would be very welcome - many thanks

Dad's estate is worth over £500k so will be liable to pay IHT - the £60k will of course be part of the £500k allowance and mean that we only have £440k allowance left before we enter IHT territory.

What do you mean by that?

What £500k allowance?

Presumably they mean NRB (£325k) + RNRB (£175k)

Robbo33

Many thanks to everyone for their input

In no particular order:

• Dad was divorced
• £500k IHT exempt allowance is if the house is being passed to children / grandchildren, which it is; it's £325k if this is not the case
• Just read the link from @JGB1955 (thanks!) and now understand that the taper rate doesn't apply unfortunately - it's only applicable if the TOTAL gifts made in the 7 years before death EXCEEDS the £325k tax free allowance. Which it doesn't 
• It was definitely not a loan as there was no requirement to pay it back 

Crikey, all this is so bloody complicated!

Rodders53

You can _probably_ claim 2 x £3k of annual gift exemption on that £60k gift (£3k year of gift and £3k for previous year) to reduce it to 'only' £54k...

Every little helps