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Where Taxpayers and Advisers Meet

IHT on Gift

Joined:Sat Sep 16, 2023 2:47 am
IHT on Gift

Postby kramgoon63 » Sat Sep 16, 2023 2:52 am

Sadly my father recently passed away and I am executor of his estate.
He has left all his estate to my mother (his spouse) so presumably no IHT to pay there.
However, around 4 years ago, he gifted me £35,000.
Does that £35,000 now attract IHT or is there no IHT to pay as it's less than his £325,000 allowance.
If there is IHT to pay on that £35,000 gift, would it be tapered so maybe 32% payable for 3-4 year tapering.
Also, can I apply any £3,000 annual allowance to reduce that £35,000 gift to £32,000 (and maybe even to £29,000 by using the next tax year's allowance too).
Thanks in advance.

Joined:Fri Jun 01, 2012 10:11 am

Re: IHT on Gift

Postby strawn » Sat Sep 16, 2023 10:10 pm

I'm an amateur but I suspect that the gift you received is tax-free but that on your mother's death the amount of NRB her estate can claim based on your father's estate will be £325k less £35k = £290k. Her own NRB is presumably unaffected.

I'm keen to be corrected, if necessary.

Joined:Sat Sep 16, 2023 2:47 am

Re: IHT on Gift

Postby kramgoon63 » Sun Sep 17, 2023 12:55 pm

Thanks for your reply.

I had half an idea that would be the case and I'm hopeful it's correct, perhaps somebody could further confirm.

Can I reduce that gift from £35,000 to £32,000 by using his £3,000 annual allowance (and maybe even to £29,000 by using the following year's allowance too).


Joined:Fri May 16, 2014 3:47 pm

Re: IHT on Gift

Postby AGoodman » Wed Sep 20, 2023 9:32 am

Yes, but its the current year's allowance plus the prior year's allowance brought forwards - assuming it wasn't used for another gift.

And yes, the transferable nil rate band band will reduce, albeit it is proportionate. If the nil rate band stays at £325k, it will be a simple deduction but if the nil rate band ever changes, the sum will be slightly more complicated.

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