Had gift within 7 years

[overitall1]

Just curious. If I was to be left, say £10k in a will, but was given a £5k gift 3 years before the person who died, died, what happens? I know you have to declare it for tax purposes, but what does that mean? Do I keep the £5k and just pay tax, does the £5k go back into the estate? Does it get taken off my £10k inheritance? I have absolutely no idea!

How much is the estate total going to be roughly? Because if it's a relatively small estate then the 7 years is immaterial for £10k

Nothing happens unless the estate is over the inheritance threshold (£325,000 for one).

Also depends on how soon they die after giving it - it's a sliding scale where you owe a smaller % as time goes on. I think it starts sliding after 4 years.

Then it's up to your solicitor/executor as to how it gets paid. It's not your personal liability, it's that of the estate, so they have to deduct it from your slice of applicable, HMT don't care as long as they get it within 6months,

Really? I didn't realise it made a difference, so say £300k. You are told to declare any gifts over £250.

Applicable meant to say *the pie!

@Useranon1

Nothing happens unless the estate is over the inheritance threshold (£325,000 for one).

Also depends on how soon they die after giving it - it's a sliding scale where you owe a smaller % as time goes on. I think it starts sliding after 4 years.

Then it's up to your solicitor/executor as to how it gets paid. It's not your personal liability, it's that of the estate, so they have to deduct it from your slice of applicable, HMT don't care as long as they get it within 6months,

Ah, thank you! So basically if I was left £10k and I'd been given a £5k gift I'd get £5k and a proportion of the £5k that goes back into the estate? That makes sense.

There are annual tax free allowances for gifts, so it may depend whether these were used fully. Worst is that the value is considered part of the estate for iht purposes but that is the executors and heirs issue and won't affect specific legacies unless there are insufficient assets left to pay out.

No you still get the 5k +10k unless the estate is worth less than the legacies. Only the residual value is reallocated to the estate, if appropriate, not the actual money.