Claiming annual exemption on IHT403 form

dmkg

I am a little confused about what to claim the £3000 annual exemption allowance on IHT403 form and would appreciate some help.

In tax year 2018/19 two cash gifts were made by the deceased: one of £3000 which was more than 7 years before date of death and the other of £12000 which falls in year 7 before death.

Should I simply ignore the £3000 gift as it was made 7 years before date of death and deduct the annual exemption from the £12000 gift?

Keep_pedalling

The first gift will have used up that year’s  allowance so it can’t be deducted from the second larger gift. Yes you don’t need to declare the first gift on the form, but you have no exemption to deduct from the £12K.

dales1

But if the £3k annual exemption was not used in the previous year, then it can be carried forward and used against the £3k gift. Leaving the 2018/19 year's £3k annual exemption available to offset the £12k gift.

Keep_pedalling

dales1 said:

But if the £3k annual exemption was not used in the previous year, then it can be carried forward and used against the £3k gift. Leaving the 2018/19 year's £3k annual exemption available to offset the £12k gift.

Good point.