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IHT and other taxes on single large cash gifts
Comments
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older_and_no_wiser said:DRS1 said:How would the parents get the cash for the gift? If they have to sell something then there is CGT to consider.
Also given the will they would probably want to give the same amount to both children at the same time.
It is only one child getting the gift.
By all means educate the parents on the fact no IHT would be due (if the house is worth £350k) as long as they would not be offended or uncomfortable having their finances discussed. Maybe then they might decide to give both children a larger gift than £3k.0 -
the suggestion could be that one child has a large gift now, as they need it, and the other waits with the will being adjusted to reflect this.I'm a Forum Ambassador on the housing, mortgages & student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.0
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fuzzzzy said:I agree with DRS1. It would seem a bit off to suggest to the parents that one child get a large gift.0
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older_and_no_wiser said:fuzzzzy said:I agree with DRS1. It would seem a bit off to suggest to the parents that one child get a large gift.
Sounds like both just need to talk to the parents, as it certainly makes more sense to release money now when needed.0 -
what are the tax implications if I gift my children say £30,000 while I'm still alive. my estate is well below £325,000.0
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Ricksen said:what are the tax implications if I gift my children say £30,000 while I'm still alive. my estate is well below £325,000.1
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Tax implications are so complex.If the gifted cash is, say 500K, to an adult son/daughter, does the parent need to inform HMRC? I understand that this would need to be entered into IHT403 form if the parent passed away in less than 7 years after the gift, but how can people register that large sum gift?0
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A couple of points, and hopefully this aids the OP.
If the parents have indicated they want their hard-earned wealth to go to their children/grandchildren, it is NOT just the IHT you have to worry about, but the possibility of care home fees.
Some have talked about one child getting a handout whilst the other may not. The people that are saying that have forgotten the important factor that the parents judging by the OP post here, do have the mental capacity to decide their finances/life and therefore are free, rightly so to give or not to give as they see fit.
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@UnsureAboutthis you asked the right questions. I suppose the assumptions here are other things already considered (for e.g. equal treats to all the children and that they are fit to receive the gifts, gifting not depriving the giver thus no implication about care home fees...)
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Several times before, it was mentioned in MSE forum that people can buy insurance to cover the liabilities if they die before the 7 years after gifting.I will look for another comment like this oneBut it seems to be not right. IHT (if any) is the liability of the person who has received the cash gift, not the one who gifted, right?If the person who has given the gift passes away before the 7 years is up then there is no way to avoid any IHT incurring from this gift.
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