IHT - GWRoB - Complications

silvercar

https://forums.moneysavingexpert.com/discussion/comment/82166662#Comment_82166662

In that worst case, FiL would have to accept it was a gift, so it would be a failed PET [though allow for £3k gifting for the current and previous year. It wouldn’t be a GWRoB as there would be no one insisting it was so, when the time came to consider FiL’s estate.

Dead_keen

It wouldn’t be a GWRoB as there would be no one insisting it was so, when the time came to consider FiL’s estate.

If the person receiving the cash and the PR knew then the fact that no one insists on it does not change the responsibility of the PR to report it as such.

Grumpy_chap

https://forums.moneysavingexpert.com/discussion/comment/82166988#Comment_82166988

Sorry, who is the "PR"?

Dead_keen

PR = Personal representative, it covers both executors and administrators (i.e. where there is no named executor)

Grumpy_chap

https://forums.moneysavingexpert.com/discussion/comment/82167029#Comment_82167029

Thank you.

silvercar

https://forums.moneysavingexpert.com/discussion/comment/82166988#Comment_82166988

My interpretation (and yours and the OPs may vary).

It seems that OP is trying to keep the peace with the FiL, as many do with elderly relatives. In this case, by nodding along to the fact that the gift is actually not quite a gift in the fullest sense, but a gift with strings and the return of any prizes generated. The rules on premium bonds are clear, you can buy for someone else, but you cannot hold premium bonds in someone else’s name. So once the FiL has agreed that the money is being used for premium bonds he knows that the premium bonds don’t belong to him. That there is an undocumented agreement running alongside that the prizes be given to OP and even the actual value of the bonds can be requested back, doesn’t carry weight.

Dead_keen

That there is an undocumented agreement running alongside that the prizes be given to OP and even the actual value of the bonds can be requested back, doesn’t carry weight.

That's not what the IHT legislation says.

The whole objective of the GWR legislation was to stop people making gifts with strings attached in a way that avoided inheritance tax. Whether or not the premium bond rules are broken does not change the IHT position.

phlebas192

The situation is quite clear. If either or both parties consider that the amount 'gifted'; is still somehow controlled by the person making the gift then there there remains an element of control and it is GWRoB. If FiL ever relinquishes control.then it would become a 'normal' gift subject to the 7 year PET rule from the point that control was relinquished, but it can't be backdated.

More importantly IMO, given the stated facts, is that FiL retains influence over the premium bond investment and the distribution of prizes, This is clearly against the rule that PBs can only be owned by a single individual. If NS&I ever find out about this then not only would all prizes be required to be repaid but the PBs themselves would also be subject to seizure. I don't know what criminal sanctions might be involved but - just to be clear - OPs' wife is indulging in fraudulent activity by purchasing PBs which her father retains any rights to.

Sorry to be blunt, but FiL is clearly a bully and is attempting to use his wealth to control his daughter to the extent that she indulges his illegal activity. She should absolutely refuse this and do what she can to rectify the situation.

eskbanker

This is clearly against the rule that PBs can only be owned by a single individual. If NS&I ever find out about this then not only would all prizes be required to be repaid but the PBs themselves would also be subject to seizure. I don't know what criminal sanctions might be involved but - just to be clear - OPs' wife is indulging in fraudulent activity by purchasing PBs which her father retains any rights to.

Sorry to be blunt, but FiL is clearly a bully and is attempting to use his wealth to control his daughter to the extent that she indulges his illegal activity.

Do you have any authoritative citations to support the assertions that the proposed setup is fraudulent and illegal, as opposed to potentially breaching the terms of the customer agreement, and that 'seizure' is a potential outcome?

silvercar

Is this any more than a family expectation that people help each other out when they can and also therefore have an expectation that the same family members who benefit from this help would do the same in return?

Ok, FIL seems to want to appear to be in control of the wins, that everyone seems to have the expectation that FiL will say treat yourselves with the money. So all FiL is doing is reminding you and him that the prize arrived due to his initial benevolence.