Another annoying Inheritance tax question about gifts.

[namechangeranonymouse]

Parent A (married) dies in december 2020
Parent A gifted adult child B £6,000 from a joint account in January 2018
Parent A gifted adult child B £11,000 also from a joint account, in May 2018
Parent A gifted adult child B £19,500 in October 2020 from an account in her sole name.

No gifts other than these.
How is it worked out what needs to be (?) paid back into the Estate. Does anything need paying back.

Estate is under the IT threshold.

When you do the inheritance tax calculator it asks you for dates and amounts of any gifts and works out for you. It won't require anything to be paid back to the estate, but may affect the tax due from the estate (but it sounds like that won't be the case here).

@OctopusSay Is the only issue inheritance tax? I thought there were rules around giving £3000 per year and someone dying before 7 years?

Only because those gifts form part of the estate for inheritance tax. There's no law that can prevent someone from giving away their own money.

I believe that if you give someone a lot of money (>£3K) and then die before 7 years, the money has to be counted in the estate for inheritance tax. But if the estate is too small for inheritance tax, then the £3K is too small too.

If the estate plus the gifts are under the IHT threshold then there is no issue.

If above the threshold then the estate needs to pay the relevant tax, it isn't a point of 'paying back'.

Lovely, thank you :-)

And you could argue that half those amounts came from spouse of A so also take their annual allowances into account. If estate including those amounts is below threshold there is no iht to pay.