cash gift and death

[dizzy174]

i know of someone who has received upwards of 40k in gifts recently. unfortunately the gifter has died. i understand that the amount is now taxable at 40% but how will the government know?
tia for any information

The executors would need to review the accounts and declare gifts made on last seven years(there are annual and specific tax free allowances). However the estate is liable for any IHT due, not the recipient.

Bank details unless they had it at home .

When you're an executor you have to look at the accounts for the last 7 years and investigate any large amounts.

If they are gifts there is a box on the Probate form that you have to fill in.

IT is calculated on this amount and other aspects of the estate.

An executor is legally obliged to fill this in correctly.

As a previous poster said, it is the estate that is liable, not the person who received £40k.

tax will only be payable if the total estate is above IHT thresholds

£3k can be gifted annually exempt of IHT, anything else will fall within the 7 year rule unless it was gifted under IHT403 from income not capital.

What sort of gifts - items or money?

£3,000 can be gifted annually and one year backdated so if no previous gifts.
£34,000 would be subject to inheritance tax.
The executors should check bank accounts and make enquires regarding the £40,000 payment.
HMRC will have knowledge of all money transfers over a certain amount.