Inheritance Tax?

[merlinsboy]

We are aware someone can give up to �3k a year without paying IHT. Are the recipients of these gifts liable to pay IHT on any amount above the 3K even if the total estate does not breach the IHT threshold?
Who actually goes through the deceased persons estate to determine how much is paid and by who?

[Loosehead]

You seem very confused.

There is not limit to a gift, there is no tax on a gift, however if the giver was to die within 7 years then the gift can be considered part of the estate for IHT purposes, there is taper relief for those 7 years. Even then it is only taxable if the estate is over the threshold, which I believe is �250K. IHT is only levied on estates, I hope that helps.

[Law Student]

The IHT liability is determined by the Personal Representatives (executors or administrators) of the deceased's estate.

The rules are complicated, but the amount of IHT payable on the estate can be affected by gifts made in the preceding 14 years. Assuming that the deceased hasn't given away more than the nil rate band (currently �300,000) during that time, the recipients of any gifts in excess of �3,000 should not have to pay IHT. The effect of the gifts is to reduce the amount of the nil rate band available to the PRs, and thereby increasing the tax payable on the estate.

If you're talking about big gifts, in excess of �300,000, the recipient could end up with a bill for IHT. Again, the PRs should calculate the tax due.


LS