Can we use this money to buy a house? Mil's gift.

[8008isbest]

Mil gifted dh a fairly large sum of money a good few years before Ill health and death. Dh was also left a decent amount in her will.
Dh thinks there may be questions about the gift as it wasn't willed to him? I really don't know?
We'll probably have to get legal advice but thought I'd ask if anyone has come across this?
TIA

Did she have capacity?

Yes she had capacity until not long before death.

How many years before she died? If it was more than 7 then there are no IHT issues.
And he can spend it on whatever he likes. It's his money. He might have to provide details of where it came from for money laundering purposes but that's it.

It isn't enough for inheritance tax

As long as was given 7 years before there is no liability inheritance tax. If within 7 years depends on rest of value of her estate

The gift was 50k. Then her will had more.

Then what exactly are you worried about?

What isn't? Her estate?

Would it have been over the threshold if she hadn't given the gift?

No

How long before her death was it given?

As long as probate was completed properly and any inheritance tax paid then you shouldn’t have an issue.

Where we live you can buy a decent house for 150k

I’m not sure I understand the issue. It’s perfectly fine for her to have given DH a gift - it’s separate from anything willed to him.

Only issue might be with inheritance tax, but you’ve said this isn’t a problem.

What specifically are you concerned about?

Was DH the only beneficiary? IHT is on the value of the whole estate, not just the bit left to one person. If he is the only beneficiary and gift plus inheritance is less than £325k (or £500k if including main residence) then he should be ok.

You will need to be able to demonstrate to your solicitor how he came by the money to satisfy money laundering rules, but a factual account with bank statements will likely suffice.

no it’s yours to do with what you want.

any tax liabilities are with the estate/executor and will be paid before your dh gets his residual share.

so nothing for you to worry about.

i have noticed recently that many people don’t seem to understand gifts, tax and inheritance. My mum wanted to gift the grandchildren a substantial sum, until a friend told her “there’ll be tax” and she could only gift them 3k each. No amount of explaining could persuade her that the grandchildren would not be paying tax, she would not be paying tax, there would be no tax, even if she wanted to give them 50k each. Any tax is on the estate after death, and only if more than 325/500k. Which her estate is not.

is that why you ask the question? In case you use it for a house then the tax man comes for a chunk? It’s yours.

Thanks everyone.