Father sharing his inheritance with me...

[Crazyoldmaurice]

My dad has inherited some money from his parents and has just received the cheque from the executor of the will. It has already been through inheritance tax and has been divided up by the siblings.

My dad wishes to give me half of his money (around 50k I think) is my dad able to do this without having to pay further taxes? I remember reading something about having to pay tax on any gift above 3k? If not what is the best way of doing this? Is he able to just transfer straight to my account or is there something preventing this?

The Will should have been varied so the money came directly to you from the from the estate
If it's within 2 years of the date of death it might still be possible to do this
Otherwise this is a potential exempt transfer
If your father dies within 7 years IHT will be payable on the gift if his estate is over the IHT threshold

Thank you. It wont be over the threshold if my dad passed away in that time as he pretty much has nothing but a small property up north so would be way under 300k.

What would be the best way of going about transferring the money to me? Grandmother died in May so well within the 2 years.

If your Dad were to die in the next seven years and you’re sure his estate won’t meet the inheritance tax threshold then he can just give you the money now. The tax on gifts over £3,000 is only if he dies and they’re looking to see what should have inheritance tax paid on (gifts over the past 7 years). There’s no income tax to pay on a gift to you.

Having said that, a variation of the will would ensure that even if circumstances change the gift is exempt from inheritance tax.

Thank you! 100% sure his estate wouldnt go over 300k... I've been lending him money for years! Does that mean he can literally walk into the bank and do an instant transfer or write a cheque for that amount?

Yes, cheque or bank transfer is fine.

One thing you might want to consider is if your father goes on to need help from the government. If he started claiming benefits and they see he's given away a large chunk of money that can be seen as him depriving himself of money which he could otherwise have used. Same goes for if he needs help with costs of living say in a care home.

I'm not sure if there is a time limit for this but it is something to consider - particularly if he is likely to need government assistance in the near future.

Same goes for if he needs help with costs of living say in a care home.

I'm not sure if there is a time limit for this but it is something to consider - particularly if he is likely to need government assistance in the near future.

There is no time limit as such but this can only be a problem if you did it with the intent to avoid care home fees, which unless you pretty much know now that you will need to go into a care home it would be impossible for the council to prove you did.