Tax implications?

Alex444

My mother recently died after being ill for a number of months and at one point we thought that a nursing home was the best option. She had £42K in Premium Bonds and about £7K in her current account,  so it was decided to withdraw £20K from Premium Bonds and split money between my sister and I.
What are the financial ramifications of doing this now that she has passed away? We all live in Scotland. 

DE_612183

It's below the threshold for Inheritance Tax - why did you withdraw the money?

I assume to try and avoid care home fees - which would not have happened.

Keep_pedalling

While it was wrong to do this, it should’ve have any financial implications now if these were her only assets. If she owned a home and you need to apply for confirmation the these need to be declared as gifts.

sheramber

Alex444 said:

My mother recently died after being ill for a number of months and at one point we thought that a nursing home was the best option. She had £42K in Premium Bonds and about £7K in her current account,  so it was decided to withdraw £20K from Premium Bonds and split money between my sister and I.
What are the financial ramifications of doing this now that she has passed away? We all live in Scotland. 

If you did it ti avoid care fees it wouldn’t have worked. She would have been assessed as still having the money.

Did someone have POA for  your  mother to allow the bonds to be withdrawn?

Alex444

My sister and I have POA, the withdrawal was done in the hope of her living longer and saving some money on care home fees.
We used ours to convert bathroom into a wetroom on the chance she may have had to move in with us.
My sister paid for a private knee replacement operation for her husband, who was really struggling and was on NHS list.

Alex444

I take it that her estate would now be regarded as "Large" if there 20K is included?
There is no property involved.

buddy9

Alex444 said:

I take it that her estate would now be regarded as "Large" if there 20K is included?
There is no property involved.

Is there a will involved, if so who is executor?

Is there a surviving spouse?

p00hsticks

Alex444 said:

My mother recently died after being ill for a number of months and at one point we thought that a nursing home was the best option. 

Did she actually end up on a nursing home ? If so how was it paid for ?

Mands

Alex444 said:

My sister and I have POA, the withdrawal was done in the hope of her living longer and saving some money on care home fees.
We used ours to convert bathroom into a wetroom on the chance she may have had to move in with us.
My sister paid for a private knee replacement operation for her husband, who was really struggling and was on NHS list.

Putting aside any tax implications and the fact that withdrawing the money would not have protected against care home fees ... your actions were in breach of the Power of Attorney you held.

Your legal obligation was to act in her best interests. There is no way to argue that spending 40% of her total assets on a new bathroom and a new knee benefited her. 

Alex444

There is a will, my sister and I are executors, widow, never went to Care home, died in hospital. 

Not allowed to gift money?🤔

Keep_pedalling

Alex444 said:

There is a will, my sister and I are executors, widow, never went to Care home, died in hospital. 

Not allowed to gift money?🤔

Not if it is aimed at avoiding care fees as that is classed as deliberate deprivation of assets.