IHT - Proving purchases made on behalf of

ABetterDeal

How do HMRC treat purchases made on behalf of someone (e.g. online groceries) going back many years even, but where there hasn't been any explicitly logged recoupment of the monetary cost? Or where there is an informal/gentleman's agreement to be payed back "at some point" for all historic purchases made?

It could be classed as an informal 0% APR loan maybe?

It's hard to find information on specific cases like these

Dead_keen

It's all about the facts. Does the recipient of the groceries actually owe money in the sense that the executors could go to court and demand repayment? If they don't then the starting point will be that they are transfers of value (posh IHT words for a gifts).

How do you decide if the executors can get enforce the debt? Understand the facts and talk to a lawyer if it is unclear.

If there is a debt, that's an asset of the estate and the executors would (i) collect the cash, and (ii) include it in the value of the debt in the estate.

If there is no debt, a transfer of value is it exempt so the executors do not need to worry about it? If it is mum buying food for their husband, their under a 18 year old kids, a 20 year old daughter at university, that's exempt. Other facts may make it exempt too.

If not exempt, it's just a normal gift then normal exemptions may apply (£250 and £3,000 exemptions may apply, else it's likely to be a PET).

silvercar

Is the person that possibly is owed the money the deceased or very much alive ie are we talking about buying granny her groceries for the last 10 years and now that granny has passed away the donor would like the money back? Or are we saying money may be owed to the estate of the deceased?

Keep_pedalling

What sort of annual spend are we talking about here?

ABetterDeal

All relevant parties are still with us, but IHT is becoming a bigger concern as time goes on so looking to resolve any uncertainties before it's too late. Mostly here it's about groceries and other maintenance costs for support that are GA'd (e.g. car running costs).

These expenses easily go back 5+ years and probably sum to around £2-3k per year. The issue is not whether it's IHTM14250 (it should hit the criteria on that) but rather whether HMRC will recognise the GA to reimburse but where the reimbursement is just on an ad hoc basis.

Keep_pedalling

https://forums.moneysavingexpert.com/discussion/comment/81863314#Comment_81863314

Is this person also using their annual £3k exemption? If not then this will be covered by that.

ABetterDeal

They are, and then some. Need to be careful there aren't any surprises from HMRC when the time comes!