Inheritance tax

Shimster1

Hi everyone can't seem to find an answer but I've been doing my mum's shopping for the last seven or eight years using my bank card then then I get to her house she gives it me back via bank transfer twice a week.As a heavy drinker and smoker this could mount up each week to around £200 to £300. My only evidence would be that it would show in both bank statements but I did my shopping too so wouldn't be exact.

Looks like mum may be about to die and someone told me this may be a problem for inheritance tax when its sorted out.

I never realised this as thought it was better to do it this way as when she became housebound it didn't look odd that her card was being used in shops.

Any help would be appreciated.

Thanks

sammyjammy

This is not really an issue, presumably there isn't separate £300 coming out of her account from buying her own shopping. Does her estate actually take you into inheritance tax territory? You would have to declare any annual gifts over the total of £3k a year but getting the shopping refunded is not a gift.

Sorry about your mum, don;t worry about the shopping.

Shimster1

Thanks for the reply.

Not sure think it doesn't coz house worth around £350000 but half is going to cancer charity ( don't get me started, think my dad got duped years ago as he never had cancer in his family but gave his half of house) plus around £125000 in cash and would be shared between me and my brother only

Albermarle

First thing will her estate ( when she sadly dies) be large enough to be liable for inheritance tax ? If not then you can stop worrying about tax implications. Although there most probably isn't any anyway, despite what you heard.

There is widespread misunderstanding about inheritance tax and gifts.

Shimster1

Thanks for the replies.

I think that total estate after taking half the house that's going to cancer charity would be between £275 to £3000000 dependant on house sale shared between 2 sons, so presume we are fine but not sure with the other half of house going to charity between £150000 and £175000 how that works.

Just to be sure is their any other tax implications as my trusted friend was quite adamant I could have problems even after I told him my brother knows all about this. Apparently it looks like a regular income if it happens all the time he said.

Thanks again for the comments.

otb666

I worried about this as was doing all the buying for parent and then bank transfer back like you as they did not trust online shopping with their cards. But was happy for me to use mine. It did not make any odds as estate well below 1 million nearer 400k It just meant on probate the first figure and second figure were different as gifts deducted. I know they were not gifts but did not want the hassle of listing them all otherwise.(which i could have done but not necessary) if they had been classed as gifts with reservation. Looking back i think i should have insisted they use their own cards for their own shopping but there you are it did not really make any odds.

Shimster1

Thankyou it was an extra worry at time when I really didn't need to be thinking anything else other than my mother's probable last moments.

Thankyou for all the help

Keep_pedalling

Her estate is well below IHT terretory so I can stop worrying about IHT unless she has several hundred thousand in savings that you have not mentioned.

From what you say it sounds like his half of the house is in trust until your mother’s death at which point it goes to a cancer charity. For IHT purposes the whole house forms part of her estate but it is also entitled to the transferable NRB your fathers estate so unless her estate exceeds £650K no IHT return will be needed..

Shimster1

Thankyou peace of mind

RAS

Just to clarify, it sounds like mum's IHT allowance could be close to £900k-£1m. So no IHT to pay below that limit

The executor(s) only need to make an IHT return if the value of the estate including the house exceeds £650k, because that's when they need to use the residential allowances. That has to be done before they apply for probate.

As for re-imbursement of shopping and other expenses, we had to do this regularly. You are not gaining any value just being repaid for what you've spent.

Gifts imply that you gain something of value, not minimal replacement of financial cost and loss of your own time.