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Where Taxpayers and Advisers Meet

Lifetime Gifts

ksmith20
Posts: 4
Joined: Mon Feb 09, 2009 10:20 am

Lifetime Gifts

Postby ksmith20 » Sat Feb 14, 2015 8:46 am

Hi

I am aware of the seven year gift rule but have a question around it.

If a wife passes away and the husband has the intention to make a lifetime transfer to others as soon as the death occurs but because of the time taken to sort out the wife's estate this is delayed a year or 2, say, before he receives the funds from the wife's estate to then pass on, is it possible to define an earlier date than actual date of the transfer to the others as the starting of the clock of the 7 year limit.

Many thanks if you can advise.

LozaACCS
Posts: 1504
Joined: Wed Aug 06, 2008 3:55 pm

Re: Lifetime Gifts

Postby LozaACCS » Sun Feb 15, 2015 8:02 pm

No, but it might be possible to arrange a Deed of Variation and transfer the amount from the death estate.

IanDarkwater
Posts: 49
Joined: Fri Oct 31, 2008 10:55 am

Re: Lifetime Gifts

Postby IanDarkwater » Sun Feb 22, 2015 12:21 am

You may need to be quick. You have a 2 year window after the death to put an Instrument of Variation in place.

musty
Posts: 11
Joined: Wed Aug 06, 2008 4:00 pm

Re: Lifetime Gifts

Postby musty » Sun Feb 22, 2015 7:19 pm

I have just read this one and apologise for jumping on the bandwagon. Due to a probable terminal illness I sadly anticipate being in the same position as the original questioner
As I will therefore receive the totality of my wife’s estate I will have the advantage of:
1) Being granted the double IHT allowance of £650,000 on my eventual demise.
2) As a spouse having no liability for IHT on whatever amount I inherit from my wife.
My concern is that in putting an instrument of variation in place would I lose both (or either) of 1 and 2 above. If so this is so, it would be a considerable disadvantage in my case, and possibly also to that of the original questioner.

maths
Posts: 7784
Joined: Wed Aug 06, 2008 3:25 pm

Re: Lifetime Gifts

Postby maths » Sun Feb 22, 2015 9:00 pm

I'm not sure that there is not a misunderstanding re Deeds of Variation.

DoVs are put in place by one or more beneficiaries of a death estate. It is not for the person who is to die to put one in place prior to death.

Re the original question, on the death of the wife, if the husband is to inherit, he can execute a DoV (within 2 years of he death) under which he redirects the whole or part of his inheritance to whoever he wants.
In due course once wife's estate administered all get their inheritances.

fitz
Posts: 24
Joined: Wed Aug 06, 2008 3:11 pm

Re: Lifetime Gifts

Postby fitz » Mon Feb 23, 2015 12:58 pm

It is correct to state that if your spouse or civil partner leaves you their entire estate you will not be liable for IHT and would benefit from a double IHT allowance on your eventual death.
However if by a deed of variation your wife’s estate goes to other than yourself then these significant concessions would be lost. Should the value of your wife estate be in excess of £325,000 the recipients named in the deed of variation would be taxed at 40% on all above £325,000
Moreover on your eventual death your IHT free allowance would be only £325,000.


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