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Original poster

Inheritance tax and legal gifts to family.

78 replies

NENew · 08/04/2023 13:59

Parents with an estate of in excess of £650,000. They own a house outright at around the £200,000 mark.

They are keen to help their grandchildren financially, especially to get on the property ladder. One DGC already owns a small, cheap house, the others don't.

I'm using this guidance but would appreciate some simple advice.
https://www.gov.uk/inheritance-tax

What can my parents gift? Are there any risks?

(One parents is fit and well, the other not so much.
I'm thinking at this point dedication of assets would not be applied due to one parent being fit and well.)

Thank you.

How Inheritance Tax works: thresholds, rules and allowances

Inheritance Tax (IHT) is paid when a person's estate is worth more than £325,000 when they die - exemptions, passing on property. Sometimes known as death duties.

https://www.gov.uk/inheritance-tax

OP posts:
FiledAwayInABox · 11/04/2023 08:32

Aside from the legal issue are you sure about your parents reasons for giving the money. £15/30K is a lot of money? Are you sure they wouldn't prefer a new bathroom or to pay for a cleaner or gardener? I think some older people can feel pressure to give away money (not suggesting the OP is doing this!!).

If they are outside of IHT is t it better to wait until they die to distribute the money. Most people don't go into care homes but it's not unusual to need extra support when you get older. It's expensive being 'old' - look at heating bills this year.
Id suggest that they give a modest gift such as £1k and hang on to the rest of it.

Original poster
NENew · 11/04/2023 13:10

FiledAwayInABox · 11/04/2023 08:32

Aside from the legal issue are you sure about your parents reasons for giving the money. £15/30K is a lot of money? Are you sure they wouldn't prefer a new bathroom or to pay for a cleaner or gardener? I think some older people can feel pressure to give away money (not suggesting the OP is doing this!!).

If they are outside of IHT is t it better to wait until they die to distribute the money. Most people don't go into care homes but it's not unusual to need extra support when you get older. It's expensive being 'old' - look at heating bills this year.
Id suggest that they give a modest gift such as £1k and hang on to the rest of it.

I am sure they will make their own decisions.

They have just completed works to their ‘new’ house, after returning from abroad. They are not big spenders, even though we are much more direct with them about ‘ buy the best of what you need to help you now - you can't take it with you’ and a message about ‘enjoy it’.

I suspect they may follow up their previous £5,000 per DGC, with the same again this year. All DGC’s are in a position where money towards a house purchase will be gratefully received, setting them up for moving away from an increasingly difficult rental market.

OP posts:
Velvetrevolution · 16/04/2023 22:16

Sounds like the gifts would be very helpful for DGC. My DM has recently passed away, and have been advised need to declare all gifts in the past 7 years when applying for confirmation (probate). This is even though the estate is well under IHT threshold, though with gifts might have to use my late DF’s allowance. Feel it is unnecessary bother to have to do this if not liable for IHT anyway.

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