IHT400/IHT403. Gifts from surplus income help please.

lohr500

Sorry for yet another post on gifts from surplus income, but I am going round in circles.

I am the executor of my father's will and I am in the process of applying for probate.

His affairs were pretty straightforward and his will leaves everything to his surviving spouse.

The only thing I am unclear on is some gifting that he has done over the past 5 years to his four grandchildren. In total the value is £100k.
He kept meticulous records based on the IHT403 form structure to demonstrate that the gifting was from surplus income and was not eroding any capital.
 
I have used the online .GOV inheritance tax and probate value checker, including entering the gifting value of £100k. At the end of the process it advises me that no inheritance tax is payable.

Does this mean I do not need to complete an IHT400/IHT403?

I've also filled out the online Probate application forms, but not yet sent and at no point does it request that an IHT400 or IHT403 form should be sent.  

Any insight or guidance would be very much appreciated. Thanks.

Keep_pedalling

You do not need to make an IHT return because this is an excepted estate. Even if the gifts were not from excess income this would be the case. Where this makes a difference is with his wife’s estate as her executors can claim the full transferable NRB. 

If her estate exceeds £650k on her death an IHT return will be required and form IHT402 will need to be used to claim the transferable NRB and exempt gifts need to be declared on that form so keep those records safe. 

https://assets.publishing.service.gov.uk/media/67eba2faba01abac8e9fe9af/IHT402.pdf

lohr500

Keep_pedalling said:

You do not need to make an IHT return because this is an excepted estate. Even if the gifts were not from excess income this would be the case. Where this makes a difference is with his wife’s estate as her executors can claim the full transferable NRB. 

If her estate exceeds £650k on her death an IHT return will be required and form IHT402 will need to be used to claim the transferable NRB and exempt gifts need to be declared on that form so keep those records safe. 

https://assets.publishing.service.gov.uk/media/67eba2faba01abac8e9fe9af/IHT402.pdf

Thank you so much for your quick and clear reply.
I will definitely keep those meticulous records safe and ready for the future.

Further to this, does the 7 year rule apply to surplus income gifting? In that if my mother survives for 7 years since the last gifts were made (which I hope she does) then those gifts would not need to be declared on her passing?

Keep_pedalling

lohr500 said:

Keep_pedalling said:

You do not need to make an IHT return because this is an excepted estate. Even if the gifts were not from excess income this would be the case. Where this makes a difference is with his wife’s estate as her executors can claim the full transferable NRB. 

If her estate exceeds £650k on her death an IHT return will be required and form IHT402 will need to be used to claim the transferable NRB and exempt gifts need to be declared on that form so keep those records safe. 

https://assets.publishing.service.gov.uk/media/67eba2faba01abac8e9fe9af/IHT402.pdf

Thank you so much for your quick and clear reply.
I will definitely keep those meticulous records safe and ready for the future.

Further to this, does the 7 year rule apply to surplus income gifting? In that if my mother survives for 7 years since the last gifts were made (which I hope she does) then those gifts would not need to be declared on her passing?

No, because gifts from excess income are exempt from the moment they are gifted. 

lohr500

Keep_pedalling said:

lohr500 said:

Keep_pedalling said:

You do not need to make an IHT return because this is an excepted estate. Even if the gifts were not from excess income this would be the case. Where this makes a difference is with his wife’s estate as her executors can claim the full transferable NRB. 

If her estate exceeds £650k on her death an IHT return will be required and form IHT402 will need to be used to claim the transferable NRB and exempt gifts need to be declared on that form so keep those records safe. 

https://assets.publishing.service.gov.uk/media/67eba2faba01abac8e9fe9af/IHT402.pdf

Thank you so much for your quick and clear reply.
I will definitely keep those meticulous records safe and ready for the future.

Further to this, does the 7 year rule apply to surplus income gifting? In that if my mother survives for 7 years since the last gifts were made (which I hope she does) then those gifts would not need to be declared on her passing?

No, because gifts from excess income are exempt from the moment they are gifted. 

Thanks again.