Another gifting question!!

lohr500

Possibly a strange question, but can a substantial gift from a grandparent to a grandchild be returned within the 7 year gifting window to avoid any IHT implications? Or is it a one way street?

The reason I am asking is that my mum is in a position to help my son with the deposit for a new house. The gift would be returned in 1 to 2 years,

The gift would not be a loan with any repayment strings attached. 

But recognising that if my mum passed away before the gift was returned, then IHT would be a liability.

Brie

Would IHT be liable?  Does she have the level of assets??

Keep_pedalling

If it is being paid back then it is a loan not a gift so no point in declaring it as such. Returning a gift does not undo the 7 year rule and if GM died within 7 years of the original gift and it had been returned to her then it would double count towards IHT.

if the GM is in IHT territory then why would she not want it to be a gift?

lohr500

OK. Understood.

The reason for asking is that it seems as though most mortgage lenders want to reduce the maximum loan value offer by the value of any existing loans from family.

I was thinking that if mum gave my son the money as a gift with an understanding that the gift could be returned unconditionally, then this would avoid the mortgage value offset. If it double counts on the IHT front then it's a non starter!! 

After thinking more about this and your reply, @Keep_pedalling, you are right. She should just give the money as a gift since IHT would be payable anyway if she kept the money. 

user1977

lohr500 said:

The reason for asking is that it seems as though most mortgage lenders want to reduce the maximum loan value offer by the value of any existing loans from family.

I was thinking that if mum gave my son the money as a gift with an understanding that the gift could be returned unconditionally

For the purposes of the mortgage it needs to be a no-strings-attached gift anyway, you can't gift it with an understanding that it's really a loan.