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Where Taxpayers and Advisers Meet

gift from parent to daughter

Posts: 1
Joined: Wed Aug 06, 2008 3:04 pm

Postby van » Wed Aug 20, 2003 3:07 pm

Is my mother allowed to give me a money gift and if so is there a maximum amount that she is allowed without paying inheritence tax?

Nigel Lord
Posts: 518
Joined: Wed Aug 06, 2008 2:18 pm

Postby Nigel Lord » Thu Aug 21, 2003 12:22 am


She may gift up to £3,000 in any tax year and there will be no Inheritance Tax (IHT) consequences. She may also gift an additional £3,000 in the first year (if no gift was made in the previous year).

If gifts exceed this amount, they are treated as Potentially Exempt Transfers (PETs) for IHT purposes. This means that there is no lifetime charge but, in the event that you mother dies within 7 years of making the gift, some or all of it will be included in her estate when computing its value for IHT. The proportion of the gift 'added back' to the estate depends on whole years of survivorship and are as follows:

Less than 3 years - 100%
3 - 4 years - 80%
4 - 5 years - 60%
5 - 6 years - 40%
6 - 7 years - 20%
Over 7 years - 0%

Your mother's estate will, of course, have a nil rate band (presently £255,000) so if the value of estate on death is less than this no IHT will arise.

If you require any further assistance please do not hesitate to contact us, and we will be happy to act on your behalf.

Nigel Lord
Lord Associates
Taxation & Business Consultants
Caxton House
Old Station Road
Essex, IG10 4PE
020 8418 9101 & 07769 931852

Posts: 100
Joined: Wed Aug 06, 2008 3:10 pm

Postby robertmlaws » Thu Jul 01, 2004 8:48 am

Nigel Lord says that "The proportion of the gift 'added back' to the estate depends on whole years of survivorship and are as follows..."

I respectfully point out that it's not the gift that is tapered but the tax. If the total of all gifts is less than the nil band then there is no tax (because CTO make you use up the nil band first on the lifetime gifts) and so the taper has no effect.

not a lawyer

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