IHT Gift who pays

Coopers2307

My wife and I's estate would be eligible for IHT. I recently gave £10,000 to my daughter to help with a flat purchase. If I were to die within 7 years would she have to pay the IHT or would the gift be rolled over into my wife's estate and none due. I have already separately used my annual £3,000 gift allowance. 

eskbanker

Coopers2307 said:

My wife and I's estate would be eligible for IHT.

Estates aren't combined like that - does yours (individually) exceed the threshold?

poseidon1

Coopers2307 said:

My wife and I's estate would be eligible for IHT. I recently gave £10,000 to my daughter to help with a flat purchase. If I were to die within 7 years would she have to pay the IHT or would the gift be rolled over into my wife's estate and none due. I have already separately used my annual £3,000 gift allowance. 

No, it would simply use £10k of your NRB on death. No tax on daughter, just a slight fall in your NRB.

With this in mind, and if you intend future gifts exceeding the £3,000 annual exemption keep good chronological records so that you know how much of your NRB is at risk over each 7 year cycle. This would also help your executor who would be tasked to track and report the gifts on your eventual death.

Also don't forget to use your wife's annual gifts allowance, even if it means your gifting funds  to her for her to gift on.

Albermarle

Normally recipients of gifts are not liable for IHT ( not just in your case but generally)
One case where they could be is if the gift is very large ( typically > £325k)

Yorkie1

You may also find that the gift is treated as coming from you and your wife, so only 50% of it falls into each person's estate for the purposes of estate valuation / IHT in any event

Coopers2307

eskbanker said:

Coopers2307 said:

My wife and I's estate would be eligible for IHT.

Estates aren't combined like that - does yours (individually) exceed the threshold?

Yes it would.