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Lifetime gifts rules - any probate experts out there?(10 Posts)
My sister (Dsis1) very sadly died last autumn after being diagnosed with an aggressive brain tumour just 18 months before. She made me executor in her will, and I have been going through things to value her estate (which is liable for IHT), ready to apply for probate.
Before I can do that, I just have a few questions that I haven’t been able to find straightforward answers for, if anyone can help?
Q1: When Dsis1 was losing her mobility in her final months of life, she bought our other sister (Dsis2) a used car for £3k to support her care - to take Dsis1 out, bring her to hospital appointments etc. The car was registered in Dsis2’s name. Would this be classed as a lifetime gift? Or is it somehow part of Dsis1’s estate? Or neither?
Q2: In the government’s guidance around exceptions to lifetime gifts, it includes "payments to help with another person’s living costs, such as an elderly relative or a child under 18”. In the past few years, Dsis1 supported our two younger siblings’ living costs at various points: DB while at university, and Dsis2 when she was out of work between jobs. The amounts add up to a few thousands pounds. Would this be included in this exception? Or is it only for dependents?
Q3: Two years ago, Dsis1 gave £2k to our dad and stepmum as a wedding gift. The guidance says "wedding or civil ceremony gifts of up to £1,000 per person" are exempt from the lifetime gifts rules. Would the £2k gift therefore be exempt - as the gift was for both of them? (I just wonder why the guidance doesn’t say “up to £2,000 per couple”.)
Q4: This is a delicate one. On top of very gruelling chemo and radiotherapy treatments, my Dsis was understandably throwing everything else she could at her cancer - keto diet, all kinds of supplements etc. For about a year, she had my DB acquire some CBD oil (strong stuff), for which she paid him by bank transfer. These payments weren’t gifts obviously, but DB wouldn’t be able to produce any proof of purchase if you see what I mean! My DB wants me to declare the payments as gifts, as he’s nervous about the bank transfers being queried. This doesn’t seem right to me, but I don’t know if these things are ever queried!
Sorry for the lengthy post, and thanks for reading if you got this far. Any insights that anyone can share would be so helpful, thank you.
Bumping at a more reasonable hour.....
2) Dsis2 not covered by that relief. Shri separate relief for supporting education
3) If she gave £1k to one and £1k to the other then both covered
4) How much £ are you talking about?
Actually technically 1 would be a gift with reservation of benefit sorry - so would still form part of estate for calculations.
I'm so sorry you lost your sister. Cancer is an absolute bastard of an illness. You must feel a lot of pressure to deal with her will in the spirit in which she intended.
1) is a gift. Presumably if your sister had recovered, she wouldn't have asked for the car back?
3) £1K to one person and £1K to another - that's straightforward
Wouldn't 4) be the same as if she was asking him to do any online shopping?
Thanks both - that’s so helpful.
1) I think my confusion over the car is that my DSis2 didn’t need or want it (she lives very centrally with no parking), aside from of course being happy to help DSis1, so that blurred the lines for me somehow. I’ll just put it down as a gift.
3) The wedding gift was a bank transfer just to my Dad, so I’ll exempt half of it.
4) The amount comes to about £1.5k over the year. All items paid for by my brother in cash. He’s just worried that DSis’s bank transfers to him to cover that coincides with other payments she made to help him with fees and rent - he’s worried it would prompt investigation as to why some transfers were included as lifetime gifts and some not. But Dinosauraddict it sounds like they may be exempt anyway?
Thanks again for helping me out. It’s been a tough few months and my brain is probably not thinking entirely clearly yet!
On 4, I'm not personally supporting what it was spent on. But I wouldn't worry about an investigation. It was given to your bro to pay for goods for your sis. You wouldn't be expected to provide Sainsbury's receipts...
And I'm sorry you're having such a tough time. It's shit.
No idea where the wink came from - was just supposed to be flowers
Although 1 Is almost certainly a gift it's probably a moot point as you can give away up to £3,000 per tax year exempt from IHT. You can carry up to one year's unused allowance forward.
Regarding the payments to the brother if you, as executor, are satisfied that these were not gifts then you don't need to include them on the form (in my view).
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