Inheiritance tax and gifts made by parents

km1500

Keep_pedalling said:

Lilio8 said:

Keep_pedalling said:

The executor need to declare the non exempt gifts on the IHT return (if one is requires) and the have to be included in gross and net values in inheritance tax on the probate forms (even if no IHT is required). 

Gifting never creates a higher tax IHT liability so that is not a reason to stop gifting is you can afford it. You parents net worth would need to be over £1M before there would be any IHT liability. 

Applying for probate is not horribly complicated so there is usually no need to employ a solicitor to do it, that just cost money and usually takes longer.

Do your parents have wills in place? Have they put lasting powers of attorney in place?

Hello.

I'm confused about  the 'gifting' part.  What about gifts that are things (not money), e.g. a car, a bicycle, a ring, a silver coin, a painting, etc. (values less than £5,000)? Are these liable for IHT?

Gifted goods in kind are still gifts so count towards IHT.

yes keep a note of any coffees they buy you

wellspurs

Sorry not clear?
If a parent gives her 3 children £10k each.
Dies 6 years later
But her total estate is only £300k and doesn't reach IHT levels is there any tax implications?

Keep_pedalling

wellspurs said:

Sorry not clear?
If a parent gives her 3 children £10k each.
Dies 6 years later
But her total estate is only £300k and doesn't reach IHT levels is there any tax implications?

If by total estate you mean you have included the gifts, then there are no tax implications. If you excluded the gifts then there could be a tiny amount of IHT due, but that depends on a number of other factors. 

wellspurs

Keep_pedalling said:

wellspurs said:

Sorry not clear?
If a parent gives her 3 children £10k each.
Dies 6 years later
But her total estate is only £300k and doesn't reach IHT levels is there any tax implications?

If by total estate you mean you have included the gifts, then there are no tax implications. If you excluded the gifts then there could be a tiny amount of IHT due, but that depends on a number of other factors. 

Keep_pedalling said:

wellspurs said:

Sorry not clear?
If a parent gives her 3 children £10k each.
Dies 6 years later
But her total estate is only £300k and doesn't reach IHT levels is there any tax implications?

If by total estate you mean you have included the gifts, then there are no tax implications. If you excluded the gifts then there could be a tiny amount of IHT due, but that depends on a number of other factors. 

Thanks, The £10k to each child was when my father died six years ago and now her total estate is about £300k. however she has my father's allowance and she is leaving the house she lived in directly to her children.
So an IHT allowance of £825k and she has nowhere near that!

Keep_pedalling

wellspurs said:

Keep_pedalling said:

wellspurs said:

Sorry not clear?
If a parent gives her 3 children £10k each.
Dies 6 years later
But her total estate is only £300k and doesn't reach IHT levels is there any tax implications?

If by total estate you mean you have included the gifts, then there are no tax implications. If you excluded the gifts then there could be a tiny amount of IHT due, but that depends on a number of other factors. 

Keep_pedalling said:

wellspurs said:

Sorry not clear?
If a parent gives her 3 children £10k each.
Dies 6 years later
But her total estate is only £300k and doesn't reach IHT levels is there any tax implications?

If by total estate you mean you have included the gifts, then there are no tax implications. If you excluded the gifts then there could be a tiny amount of IHT due, but that depends on a number of other factors. 

Thanks, The £10k to each child was when my father died six years ago and now her total estate is about £300k. however she has my father's allowance and she is leaving the house she lived in directly to her children.
So an IHT allowance of £825k and she has nowhere near that!

If she inherited everything from your father her total exemptions could be as high as £1M as there is a transferable RNRB available as well. If, on her death, her estate exceeds £325k it is better to claim the transferable NRB than her RNRB. The latter required a full IHT return the former doesn’t.