Inheritance tax implications if parent gifts £100k and dies within 7 years?

[ForAmusedHazelQuoter]

My parent has 250k in savings and no other assets, if they gift me 100k and die within 7 years will there be inheritance tax to pay?

I thought the threshold was £350k so no issue for you?

Maybe. How much depends how long they live and what the size of their estate is when they die.

There's a pretty good explanation here

This AI overview is also quite good;

The 7-year rule (or Potentially Exempt Transfer) means gifts of money or assets to individuals are free from Inheritance Tax (IHT) if you live for seven years after making them. If you die within 7 years, the gift may be taxed on a sliding scale (taper relief), with 40% tax if death occurs within 3 years.

Key Details of the 7-Year Rule

• Potentially Exempt Transfers (PETs): Gifts to individuals (children, friends) become completely exempt from IHT if you survive 7 years, says ASL Solicitors.
• Taper Relief: If you die within 3–7 years, the 40% tax rate is reduced. Gifts made 3-4 years before death are taxed at 32%, 4-5 years at 24%, 5-6 years at 16%, and 6-7 years at 8%, explains
• DBT & Partners.
• Death Within 3 Years: If death occurs within 3 years, the gift is treated as part of the estate and taxed at the full 40% rate (if over the £325,000 threshold), according to Taylor Rose.
• Gifts with Reservation: If you give away an asset (like a home) but continue to benefit from it (e.g., living in it rent-free), the 7-year rule does not apply. The gift remains in your estate, notes GOV.UK.
• Annual Allowances: You can give away up to £3,000 per year (plus other specific exemptions) without them being added back into your estate, regardless of when you die, says MoneyHelper.

Important Considerations
Who Pays: The recipient pays the tax if the gift is over £325,000, says DBT & Partners.
Record Keeping: It is vital to keep records of all large gifts, notes HW Fisher.
Trusts: Gifts to most trusts are immediately chargeable if they exceed the nil-rate band, not just potentially exempt, according to GOV.UK.

£250k is under the threshold.

But depending on their current situation, there could be deprivation of assets issues if they need care.

Oh yeah - I missed the "no other assets" part 😂

I did read this but found it confusing as I also read if the estate is under 320k then there is no tax to pay.

Yes that's right - sorry I missed the "no other assets" part. In this case, there is no tax pay regardless of how long they live assuming their estate is below 325k when they die.

Depends on the size of the estate . You get £325,000 allowance each and other allowances if you own a property which takes you up to £500k each .

You need to add up the entire value of the estate, including house, car, jewellery and any other possessions. If it comes to more than £325000 (though you can add the value of the house up to £175000 provided it is left to a spouse or child, bringing it up to £500000) and your mum died less than 7 years ago then yes, there will be some inheritance tax to pay. The tax on a gift given in the last 7 years tapers down over the 7 years so how much will depend on how long it has been since the gift.

Amazing how many people can’t extract the words “no other assets” from the OP.

No, there will be nothing to pay.

Thank you for all your answers, there will be no tax to pay.
Normally I’m good at research but I was gong around in circles with this.

There will be nothing to pay inheritance tax wise. Might be worth thinking about deprivation of assets if they need care further down the line.