Inheritance tax, gifts and 7 year rule

[madamy]

My PIL recently downsized and released a large sum of money. They plan to gift around 100k to each of their 6 children. Their estate will still be worth at least 600k after this. They are in their mid 80s and reasonably well but obviously there's a good chance that one or both will die within 7 years.

If they do, will the 6 children have to pay the inheritance tax on their 100k gifts directly, or will this be included in the overall estate and taken from that before the 'balance' is inherited?

We know about the decreasing rule during those 7 years, and at present would put aside 40% of the gift to account for the tax, but obviously if we don't need to do that, it would be great!

My DH was the executor of an estate which paid IHT on gifts, it was the estate that paid (gifts from one remaining parent, who died within 7 years of making them so it came under the sliding scale when he was dealing with it).

Many thanks all for your replies - I though I'd replied last night from my phone, but it's not posted.
Lots of discussion, and useful advice. Unfortunately, they're not terribly open about arrangements they've made and plans etc, so it's quite hard to talk to them about potential future needs eg care. But yes, they do have plenty of capital for care needs (FIL was a Dr, so very healthy pension).
As it happens, they've just given all of the children 1k, so seem to be planning on using their annual tax free gift allowance for the time being.
It's tricky because I think they had hoped that their family could use the money when it's needed (lots of grandchildren around Uni age etc).
We've decided just to put aside the 40% if a lump sum arrives to be on the safe side!

Sizeable sun of money op
please don’t ask an anonymous parenting forum!

get professional advice

I’d be surprised if your in laws have not already sought professional advice on this

Only if there is not enough money in their pension / savings / remaining property to pay for that care.

@CarmenThePanda

my aunt Is in care

£1900

a week!!

That estate would be decimated very quickly if paying out £4k a week