Postby AGoodman » Fri Aug 17, 2018 10:27 am
Nothing like as bad as that.
You can give £3,000 p.a. exempt from IHT and one year can be carried over - so a maximum of £6,000 in any one year.
The balance would probably be a potentially exempt transfer - this means that if you died within 7 years of making the gift it would be brought into account.
In practice, no tax would be paid on that gift because it would be within your nil rate band (of at least £325,000). If you have a large estate, that could mean paying some additional tax, but only if you failed to survive the seven years and your estate was larger than your various nil rate bands. For example, if you are married and left everything to your wife, the rest would be exempt so no tax. If your wife predeceased you, and you ultimately left a home to your children, you could have total nil rate bands of up to £1m. If you are single with children and a home, you could have NRBs of up to £500,000.
Essentially, it is unlikely to be something to worry about. There is no immediate tax for gifts to individuals. Absolute worst case scenario, your estate would have to pay £2,400 extra tax on other assets as a result of this gift.