Cash gifts on estate worth less than £130,000

Frugalmcdougall

Sorry, this is a long one but hopefully gives all the relevant information for my question. I’m looking for some advice please regarding the reporting of all cash gifts made within last 7 years when applying for probate on an estate that will not attract IHT. I’m the executor of a family members Will. The family member was a single mum who retired over 7 years ago and was very generous all of her life - sending money from their monthly income to children and grandchildren many times over the years - to savings accounts for the grandchildren and to bank accounts for their children. Also for birthdays, Christmas etc. Mainly small sums each time and certainly no greater than £1,000 in a lump sum. Their yearly income was circa £22,000. They helped a vulnerable family member with money each week for 2 years and that comes to around £10,000 in total. I have asked the bank for last 7 years statements and I know this will be an arduous task when they arrive as they spent/sent money many times each month. Children often went shopping for their mum who would then send the money back to them online. So not all payments were gifts but I’m unsure how I will be able to know what was a gift and what was a payback for shopping etc. Their flat is worth about £140,000 and has an outstanding mortgage but this will be paid off by a life insurance policy. No savings.  An overdraft and credit card debt comes to £10,000 in total.

As the estate, even with cash gifts, would come to nowhere near the IHT threshold how accurate does the reporting of cash gifts need to be? It will have to be a best guess unless I over report by counting all the money transfers I find on the statements as cash gifts. Are there any implications other than IHT for the family when I report the cash gifts on the probate application? Many thanks for reading.

Keep_pedalling

From what you have said, even with all the gifts the estate is well below the NRB so no IHT return will be required and the only numbers you need to clarify are the gross and net values for IHT. It is not worth all the hassle of looking at gifts from excess income, so all you need to do is get a rough idea of the amount of giving she made in the last 7 years and deduct the annual allowance of £3000 for each year for that amount. 

If you don’t think she gave away more than £3k pa then you don’t even need to do that. No one is going to challenge the numbers you put in the probate application so you don’t have to go over the top in working out the figures.

Frugalmcdougall

Thanks @Keep_pedalling this is what I was hoping I could do as it simply doesn’t make sense to put hours of work into it when it won’t make a jot of difference anyway!