Valuing estate of deceased - giftd

[AGreen]

I am calculating the value of my husbands estate upon his passing.
My query is regards to gifts. We bought our young daughter christmas and birthday presents out of our joint bank account. This was after bills had been paid so they were from our regular income. Usually it would come to about £300 for her birthday and the same again at christmas. Do I had these amounts for the 7 years prior to his death to the value of the estate? They don't take the estate over the nil rate band the annual exemption has been used in the last 2 years prior to his death ?

Thank you

[AGoodman]

As joint, that would be total gifts of £300 p.a. by each of you.

You also have a relief of £250 per year per person for gifts. That is in addition to the annual exemption.

You could therefore declare gifts of £300 but exemption of £250 (so net £50 p.a.) or you could use the gifts out of excess income exemption:

[AGoodman]

https://www.gov.uk/inheritance-tax/gifts

Either should be fine. Using the £250 would just save you having to complete the form with annual income/expenditure to claim an exemption only covering £50.

[probate_slave]

It's not obvious from the online guidance quoted above nor from the IHT400 notes, but very clear in the manual that the small gifts exemption cannot be used to partly exempt a larger gift.

https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm14180

Either the normal expenditure out of income exemption has to be used on these annual £300 gifts or else they are fully chargeable.

[probate_slave]

...although this would only affect the last two years, if the annual exemption is available for the previous five.

[AGoodman]

yes, good point

[AGreen]

Thank you for your comments. I do not need probate and the gross value of these gifts doesnt take the estate over the nil rate band. Everything has also come to me the spouse I was just trying to find out what the limit is for normal christmas and birthday gifts and gifts to your spouse - whether they ate added to the estate value. Maybe I should have given thus info at the start