Gifting Money

chipsdog5a

My Mum is 100 years old!  She only has saving and no property, savings total about £80k.  How much can she gift me and me brother?  is it only £3k in total?  can we back date this?  can anyone think of another way of using her money without worrying about the tax man?  thanks

kaMelo

What specific tax are you concerned about?

FlorayG

I think it's 3k in total per tax year but this tax year ends very, very soon...
Alternatively she can spend it. She could buy a nice car and put you and your brother on the insurance to take her for outings?
My mom had a lot of money left her by my dad when she was 84 and she spent most of it on holidays before she got too old to enjoy it. I have a photo of her going over the rollercoaster falls at Splash Mountain in Disney age 90

gravel_2

Tax man ain't coming for £80k... Not yet anyway.

Cobbler_tone

She can give you as much as she likes.

Congrats on her triple figures! 

DullGreyGuy

chipsdog5a said:

My Mum is 100 years old!  She only has saving and no property, savings total about £80k.  How much can she gift me and me brother?  is it only £3k in total?  can we back date this?  can anyone think of another way of using her money without worrying about the tax man?  thanks

She can gift as much as she wants but if she were to die within 7 years then some of it will still be considered part of her estate when calculating if any inheritance tax is due. Given the threshold for IHT is £325k then it doesnt sound likely that the estate would be paying anything even if all of it was still considered to be part of the estate. 

As to what she can spend it on? That depends on what she still enjoys doing. My gran was still taking holidays abroad until she was in her early 90s, she also decided to buy various bottles of expensive whiskey as a long term lover of the drink but had rarely gone above £50/bottle before.

phlebas192

chipsdog5a said:

My Mum is 100 years old!  She only has saving and no property, savings total about £80k.  How much can she gift me and me brother?  is it only £3k in total?  can we back date this?  can anyone think of another way of using her money without worrying about the tax man?  thanks

There is no tax on gifts. But any gifts made within the 7 years prior to death can be included in your mother's estate for inheritance tax purposes (nb: this is neutral from a tax perspective, ie the same IHT would be due whether the gift was made or not). Your mother's estate will have a £325k tax free allowance for IHT plus up to a further £175k if she leaves owns a home which is left to direct descendants such as you and your brother. If she was previously married and her spouse did not use their nil rate bands (eg they left everything to your mum) then she also gets their nil rate bands so somewhere between £650k and £1m before any IHT would be due.

What she needs to consider is that if she subsequently needs residential care funded by her local council then it could be judged to be deprivation of assets in which case the council would seek to recover the costs from you and your brother.

Albermarle

phlebas192 said:

chipsdog5a said:

My Mum is 100 years old!  She only has saving and no property, savings total about £80k.  How much can she gift me and me brother?  is it only £3k in total?  can we back date this?  can anyone think of another way of using her money without worrying about the tax man?  thanks

There is no tax on gifts. But any gifts made within the 7 years prior to death can be included in your mother's estate for inheritance tax purposes (nb: this is neutral from a tax perspective, ie the same IHT would be due whether the gift was made or not). Your mother's estate will have a £325k tax free allowance for IHT plus up to a further £175k if she leaves owns a home which is left to direct descendants such as you and your brother. If she was previously married and her spouse did not use their nil rate bands (eg they left everything to your mum) then she also gets their nil rate bands so somewhere between £650k and £1m before any IHT would be due.

What she needs to consider is that if she subsequently needs residential care funded by her local council then it could be judged to be deprivation of assets in which case the council would seek to recover the costs from you and your brother.

This is a more important point than worrying about tax.
Also to be clear it does not just apply for someone going into a care home, but includes cost of care at home if needed.

Brie

And a local authority, while being concerned if she gave you both £50k, would not be too bothered (I believe) by her giving you small regular payments that could be considered paying you for services you are providing.  So £100 a month to each for your petrol to take her about.  £2k each so you can go on hols with her etc.  Things that are reasonable.  Even paying both of you an amount to renovate a room for her to stay in one week a month or something.  Now whether you actually go on hols, renovate something specifically for her or take her out for a drive is a different matter.....

Exodi

chipsdog5a said:

My Mum is 100 years old!  She only has saving and no property, savings total about £80k.  How much can she gift me and me brother?  is it only £3k in total?  can we back date this?  can anyone think of another way of using her money without worrying about the tax man?  thanks

What tax are you worried about? £80k is way under the IHT threshold.

The £3k annual exemption is related to IHT (but regularly gets confused with other things), as does the 7 year window. She isn't liable to pay IHT regardless of whether she transfers you both £0 or £80k.

If this has something to do with trying to avoid potential future care costs, the council will investigate deliberate deprivation of assets if they suspect it, regardless of how the payments have been arranged (though as Brie said, some things are less suspicious than others).

Sorry to be morbid, but if your mum is 100, she likely has months/years rather than decades left. Why now when it would be bequeathed to you both in the near future regardless? There are tests for deprivation of assets and given the circumstances I'd say it at least appears suspicious.

As an aside, this must be the 3rd or 4th thread in a week I've read where a 80/90/100 year old has seemingly had an epiphany to immediately gift everything they own to their kids...