GP not sorting out their money gifting properly WHO will have to pay any IT ???

Also, it’s no different than them
keeping the money and then it all coming as inheritance imo. Except if they survive (and it tapers before the full 7 years) that amount will come out of the estate. If they will still have a property then that will fund care so I wouldn’t worry about that all. Is there a dead spouse as their nil rate band can be utilised too.

Absolutely, if they pay direct to the university, they are buying the service, which has no redeemable value once used - its only if cash or a cash equivalent asset (ie house deposit) is involved.

Depends how much they are spending on birthday and Christmas as you have another £250 allowance for that

it also depends when they started paying this - e.g if they have been paying a regular amount for many years prior to any onset of illness that may have required care then it is unlikely to count as depreciation of assets.

One scenario is that a parent pays £200/month towards a mortgage from when they were 60y old. They have a stroke at 75y and require a care home and then die a year later. The £36 000 paid towards the mortgage won’t be recalled by the care home for fees nor be subject to IHT provided this can all be demonstrated as being a longstanding, established and regular payment.
If a lump sum of £36000 was given at age 73, say, then it could be seen as depreciation of assets and liable to IHT if that person were to die within 7y.

You’d need to double check this but I think if it’s £3000 or less per person per year then it isn’t included in inheritance tax.

Have they kept some money aside for potential care home fees?

Probably also worth noting that in small estates and small amounts (ie £50K), a huge number of such certainly go unreported. Is that right, no, but it is certainly the case - often because the executor does not know.

There is effectively no oversight of the probate process in small estates, its done on trust, and often by non professionals, ie family members as executor.

The 325K nil rate band is also per grandparent. So if they have given away 36K per year - it is in effect 18K each. 3K is IHT exempt. So 15K x 7 years, which is 105K. Even if they add another 100K each (50K deposits x4), they are still below the nil rate band unless they are also giving away other assets to other people. It is their executors who will struggle if there are not proper records!

As far as IHT is concerned, no one can reliably tell you anything about an estate of someone still living. Last budget it was widely expected that gifts would be moved from 7 to 10 years and that the residential nil rate band would be done away with, leaving only the standard nil rate bands.

In the event nothing happened - the bands are currently fixed. But no one can really advise as to what will happen down the line.

Currently the situation is that the gift is counted as part of the deceased estate for 7 years. A thing called taper relief can apply, meaning that the amount of IHT decreases as the 7 years elapses.

The IHT would be paid from the deceased estate, except where there is insufficient funds, at which point the recipient can become liable.

Keep records, keep sufficient in a "tax pot" just in case and don't worry about it.

In that case this (total transferred to grandchildren over 7 years of £252K) is comfortably below even the lowest NRB of £325K, and as that will be applied to this first they will not need to pay IHT in the future on this if it turns out to be a failed PET (rather than successful PET or genuinely out of surplus income).
The relatively small birthday/Christmas gifts will almost certainly be out of surplus income so I wouldn’t give those a second thought.

As pp have said, it's very unlikely that you or they would have to pay anything.

If it is all in a JISA then the max that could have been transferred over 7 years is £63K (£9K/yr) - unless they have been doing the same for lots of grandchildren then I really don’t think the sums involved are likely to be hit with any IHT at all. It would be unusual for IHT to be paid from a minor’s funds (which can be accessed under these circumstances if needed) rather than from the remainder of the estate, especially with such a relative small amount.

But presumably the nominated adult/trustee can operate the account on behalf of the child for any legitimate need? Certainly we could operate accounts for our children when they were minors?

And if the recipient of the gift can’t pay any inheritance tax due, then I’m not sure of the rules? But it shouldn’t necessarily be you if you have had no benefit from the estate.

Keep meticulous records of what is received when. Gifts that are given regularly like £100 birthday and christmas cheques or even a regular contribution to e.g. music lessons is just counted as normal spending and will not incur inheritance tax if they come out of GPs discretionary spending from their monthly income and aren't reducing their capital assets. Gifts that couldn't be repeated regularly, which deplete their assets and will reduce their income henceforth, are only liable if GPs die before 7 years after the gift, pro rata. So if GPs give £70,000 one-off gift in 2025 and then survive until 2030 and die then, £50,000 is iht free. The recipient of the £70,000 almost certainly doesn't pay anything though - the IHT valuation on the whole estate is increased by £20,000. If the remaining estate is already over the iht threshold then that will mean the IHT bill is increased by a further £8,000, paid by the estate before the Will is executed. If the remaining estate is £20,000 or more under the iht threshold there is no tax to pay, and if it was a little under but the £20,000 addition just tipped it over the threshold, iht is only due on the amount over the threshold- but in any case it is the estate that pays, not a living person.

The only circumstances under which a living person might theoretically have to pay anything would be if the amount they give away is so extreme, and the duration after such gifts that they survive is so short, that the IHT bill after adding the pro-rata amounts of recent gifts to the valuation of the estate makes the IHT due be greater than the remaining ungifted assets. So if they start off with assets of £2,000,000 (which if they died with no gifting would incur IHT of £470,000 leaving £1.53m to distribute according to the Will) and they give away every penny of assets except for a small flat they live in worth £350,000 and not a penny of other assets but die only a year after doing so, then the IHT bill is £403,000 and only £350,000 of that can come from the estate so the recipients of the £1.65m that they gave away would have to cough up the remaining £52k due. This is an extremely unlikely scenario.

If not out of surplus income then the gifts become a 7 yr PET. Keep records.

Unless the estate is over £2M then the nil rate band (assuming inheritance goes to direct descendants) is likely to be £500K (£325K + £175K), or potentially up to double that if the GP is widowed.

I think the nil rate band is applied to failed PET first (oldest first) before the remaining estate, so if the gifts are below this then then they won’t have to pay IHT but it does mean the nil rate band had been used on them/partially on them so the rest of the estate will get hit harder if total remaining estate + failed PETs exceed the nil rate band.

But you wouldn’t have to pay. The relevant percentage would come out of the money you have held for your youngest. And only if the estate (once house sold etc) didn’t have enough left to pay inheritance tax.

Your own money shouldn’t be effected?

OP just bear in mind the gifts total is £325k in total. So that's going to include gifts to everyone, not just your kids. Including birthday and Christmas gifts etc