IHT form 403

thingswerentthisbadinmyday

As i’m acting under a Financial Power of Attorney for a close family member, I’ve started to keep a record of all Lifetime Gifts (which will be needed for the IHT 403 somewhere down the line).

I’m obviously fine with knowing what has been gifted since I’ve been involved (one gift on marriage of grandchild), but going back 3 years and more, the information is sketchy at best.

If every effort is made to identify gifts (from discussions, entries on bank statements, cheque book stubs, etc) but you still cannot be 100% sure of any “odd gifts” which may have been made, what happens on the form 403?

probate_slave

I agree it's tortuous to compile this information. But you seem to be doing everything possible. Clearly it's worth asking family and friends to clarify what some payments were for. Also identifying which payments to organisations were actually charitable donations. HMRC can't be more forensic than you are already being, and IHT is already such an expensive tax for them to administer that they will generally accept any IHT403 or 407 which shows reasonable care in its completion.

Keep_pedalling

Does this person still have the mental capacity to make gifts by their own volition?

thingswerentthisbadinmyday

https://forums.moneysavingexpert.com/discussion/comment/81964902#Comment_81964902

Sadly, I cannot give an absolutely definitive answer.

Keep_pedalling

https://forums.moneysavingexpert.com/discussion/comment/81964981#Comment_81964981

Then you need to be careful going forward. You need to act solely in the best interests of the donor so large one off gifts should not be made by attorneys. Where there has been a previous pattern of gifting by the donor then that can be continued but only as long as it does not impact the ability to provide for the donor’s needs for the long term.

Going back to your original question, it can be difficult for an executor to find this information if the testator has not kept records of gifting although in most cases those receiving the gifts are close family members so it should not be to difficulty to get a good picture of gifts made.

thingswerentthisbadinmyday

https://forums.moneysavingexpert.com/discussion/comment/81965082#Comment_81965082

Thank you.

That’s really helpful advice and I am extremely careful with all items of expenditure - especially gifts - where the ‘norm’ is continuation of previous years’ gifts for Xmas and birthdays. I’ve read/learned so much over the last 3 years that I’d like to think that I have a pretty good understanding now of what is and isn’t permissible. And as you say, acting solely in the best interests of the Donor has to govern everything.

thingswerentthisbadinmyday

Hope no-one minds me posting a follow up question - still connected with what needs reporting on the 403.

Charitable gifts during Lifetime. Is there a special section for these?

poseidon1

https://forums.moneysavingexpert.com/discussion/comment/81966738#Comment_81966738

Although lifetime gifts to charity are immediately IHT exempt when made, detailed records need to be kept for the benefit of Executor's computations for them to distinguish non exempt gifts made within 7 years from the exempt ones - article below explains '

https://naailandco.com/knowledge/iht/iht-gifts-to-charities/#:~:text=Lifetime%20Gifts%20to%20Charity%20and%20the%20IHT,they%20fall%20entirely%20outside%20the%20IHT%20calculation.

probate_slave

Nowhere special, lifetime charity gifts just go in the list on pages 3 & 4 where you also claim exemption for them. Fortunately, gifts to a single charity totalling £250 or less (in the year) can be ignored.

Note that IHT403 has just been revised (Apr 2026), also that HMRC want their own charity ID rather than the much more easily obtained Charity Commission number.