My mum very kindly wants to gift me a considerable 5 figure sum of money purely to help me fund a lease extension for my flat. I rang my accountant to find out if it's ok for her to give me a cheque to put into my current account without being taxed as it's a gift and he said that £2000 is the limit but he will come back to me on it. I don't want this to get messy where I get my mum to pay all the surveyor and solicitor fees as they come in and of course the bulk which will be the lease premium. As a gift, she will want to just give me the money for me to use appropriately. So, how do we do this without being taxed?
Finance experts please
- Thread starter Merlin5
- Start date
This.
Is her estate worth more than £325k?
If her estate gets hit by IHT, then that cash will be swept up in it whether she gives it to you or not. It's the estate that pays the tax anyway - it won't be you who's in for it. Shouldn't impact your decision.
If her estate gets hit by IHT, then that cash will be swept up in it whether she gives it to you or not. It's the estate that pays the tax anyway - it won't be you who's in for it. Shouldn't impact your decision.
I can't imagine it would be too difficult to match a 5 figure withdrawal from the mother to a 5 figure deposit from the child.
Soldato
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I think its too late for you to avoid IHT I'm afraid. Let your mum see you right while she can 
This,
I also can't remember if there is some kind of slide scale within the 7 years, so maybe the full amount wont be taxable but a fraction?
In which case the earlier the OP's mother transfer some of her estate the better.
WOnt make a difference at all in regards to IHT
Soldato
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You don't mention your dad, but if he's dead and they were married and she hasn't re-married, the IHT threshold should be 650K (unless he died before 1972 in which instance different rules apply).
It is a sliding scale based on the length of time within the seven years period
Plus also don't forget if when (I guess) the OP's father died, if the whole estate just went to the mum she gets his IHT allowance as well, so the threshold would now be £650k before any IHT is due
Aren't they also looking at exempting the family home from IHT calculations (Up to 1 Million) - don't think its been brought in yet though
There is no inheritance tax on birthday, wedding or anniversary gifts
MW
Which isn't that helpful if it's a "considerable 5 figure sum" as gifts have limits on them, e.g. £5k if given to a child as a wedding gift.
Doesn't make any difference whether there will be IHT due in future or not.
If IHT is due, it would get paid whether he receives the money now or as as a beneficiary from his mum's estate.
The only thing having the money now could potentially be is a benefit - as mentioned, IHT taper relief starts if mum survives for 3 years following the gift, reducing to 0% after 7 years.
If IHT is due, it would get paid whether he receives the money now or as as a beneficiary from his mum's estate.
The only thing having the money now could potentially be is a benefit - as mentioned, IHT taper relief starts if mum survives for 3 years following the gift, reducing to 0% after 7 years.