Parents in Law paying mortgage off

paulus1967

My Parents in Law are on about paying our mortgage off for us. We owe approx £40k i know that if they both live longer (which i hope they do) than 7 years than we wont be liable for inheritance tax. Is it better to keep it quite or is it best to tell whoever we tell. Sorry to sound so dumb.

Bossyboots

paulus1967 wrote:

My Parents in Law are on about paying our mortgage off for us. We owe approx £40k i know that if they both live longer (which i hope they do) than 7 years than we wont be liable for inheritance tax. Is it better to keep it quite or is it best to tell whoever we tell. Sorry to sound so dumb.

You would pay tax on the money as it is a gift if they die within 7 years. Also in that time the money will be counted in the estate for Inheritance Tax calculations.

You don't need to tell anybody unless they die when the money has to be included in their estate accounts so you would need to notify the administrator of the estate.

jonesMUFCforever

Bossyboots wrote:

You would pay tax on the money as it is a gift if they die within 7 years. Also in that time the money will be counted in the estate for Inheritance Tax calculations.

Why would YOU pay tax on the money if it is a gift?
Sure, I understand if the parents in law died before the end of the 7 years then it would form part of their estate.

Eric

helen21_2

Hi

I was under the impression that you could only give family a certain amount of money each year? Don't know how much though!

helen21