taxation on gifts

localhero

That kind of clause would be insufficent for Dr Baird.

In addition to stating that the executors must pay debts and executorship expenses, it should also say that they must pay IHT on all property passing under the Will.

Where there have been lifetime gifts it must go on to say something like "the executors must pay any additional inheritance tax which becomes payable on my death as a result of any lifetime transfer by me".

A decent willwiter will easily be able to make that clear, but without that clause the recipient of the lifetime gift will have to pay the IHT.

bear1

I don`t know if this is the right place to post but i have a couple of qestions i hoped someone could help with. My Dad has a number of properties which he rents out, is it possible for me to buy one of these at a very low amount (much lower than its worth) and if so would it then be free of Inheritance Tax if he died within 7 years or would it still be classed as part of his estate?
Also if he put money into bonds for his Grandchildren that could not be accessed by them until they were 18 or more (they are currently under 10) and he died within 7 years, would this money be classed as his estate and be liable to Inheritance tax?
Many thanks in advance

CLAPTON

If you father gifts or sells the propeerties he will be liable to CGT based on the actual value at the time of transfer/sale.

If the 'sale' price is less than the market price then this will be a gift fot IHT purposes should he die within 7 years.
You may well be worse off in some of these circumstances as he may pay CGT and his estate IHT.
seek professional advice.

bear1

So you`re saying if he gifts a property to me it will also be liable to CGT? I thought for some strange reason that CGT only applied to properties which are sold within two years of buying them, or is that to do with a new build?