Pendleside Festive Dingbats. Cd 6/1/25
Quizzes & Puzzles5 mins ago
whats the law on money gifts
if i was to be given a large amount of money by a family member whos total estate was a lot less than 350.000.. and who is still alive... but if then that person dies before the 7yr claus would i have to pay tax
or another senario if that person went into a care home before 7yrs
or another senario if that person went into a care home before 7yrs
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Inheritance Tax is only payable if the total estate exceeds �325,000. Gifts made within the 7 years prior to death count (either in whole or in part, depending upon when they were given) towards the vale of the estate but, as long as the threshold isn't exceeded, there will be no tax to pay:
http://www.hmrc.gov.uk/inheritancetax/pass-mon ey-property/intro-iht-plannning.htm
Giving money away to avoid having to pay care home fees is illegal. If the person giving you the gift was to go into a care home within 6 months of making the gift (and their assets had fallen below the threshold for contributing to care home fees), the local council could recover the cost of your benefactor's care from you. See under 'Giving money or property to other people', here:
http://www.direct.gov.uk/en/HealthAndWellBeing /HealthServices/CareHomes/DG_10031523
Chris
http://www.hmrc.gov.uk/inheritancetax/pass-mon ey-property/intro-iht-plannning.htm
Giving money away to avoid having to pay care home fees is illegal. If the person giving you the gift was to go into a care home within 6 months of making the gift (and their assets had fallen below the threshold for contributing to care home fees), the local council could recover the cost of your benefactor's care from you. See under 'Giving money or property to other people', here:
http://www.direct.gov.uk/en/HealthAndWellBeing /HealthServices/CareHomes/DG_10031523
Chris
Chris, sorry to be pedantic, and I wouldn't normally correct you but......
giving money away to avoid care home fees is not illegal. Someone can give away the whole of their estate, however, if a "significant" reason is to avoid care home fees, the Council can take the view that the donor has "deemed" capital and can charge the assets donated with the fees. There is also no time limit. So the Council can, in theory go back as long as they wish. It will all depend on the circumstances at that time. For instance, someone aged 50 in good health who puts their assets into trust to avoid a potential Inheritance Act claim by their step children would not fall foul of the "divesting of assets" provisions. However, someone aged 86, whose long term care is imminent who transfers their house to a child may well do so.
That link is terribly misleading (but what can you expect from our esteemed government!?!
giving money away to avoid care home fees is not illegal. Someone can give away the whole of their estate, however, if a "significant" reason is to avoid care home fees, the Council can take the view that the donor has "deemed" capital and can charge the assets donated with the fees. There is also no time limit. So the Council can, in theory go back as long as they wish. It will all depend on the circumstances at that time. For instance, someone aged 50 in good health who puts their assets into trust to avoid a potential Inheritance Act claim by their step children would not fall foul of the "divesting of assets" provisions. However, someone aged 86, whose long term care is imminent who transfers their house to a child may well do so.
That link is terribly misleading (but what can you expect from our esteemed government!?!
thanks for your input... i realise about care home but that was only a senario as the person is 82 and may at some point as in few years may end up in one but hopefully not....but if it was before 7yrs would that be a problem i relly am stuggling to understand legally how the goverment take everything a person has worked all their lives for and ivested wisely and saved for it all to be pointless......what makes it worse is the money this person was given to in a will was really meant for me and someone else but wasnt stated in that will....the law really stinks
Well - you know what they say - there are only two certainties in life, death and taxes. I'm afraid that's the way it works.
I'll try and replay part of Chris' good advice in different words to see if it helps.
If a person gives away part of their wealth before they die, provided they did it more than 7 years before they die, no inheritance tax is ever payable on that gift.
If less than 7 years has passed since the date of the gift, the gift is added to the total estate on death and if the total estate exceeds �325k (current figures) inheritance tax is payable (actually there is a sliding scale, so a gift given 6 years before death attracts less tax than one given 1 year before death).
It isn't a problem, and it isn't the receiver of the gift that pays the tax - it is the estate of the deceased person.
I'll try and replay part of Chris' good advice in different words to see if it helps.
If a person gives away part of their wealth before they die, provided they did it more than 7 years before they die, no inheritance tax is ever payable on that gift.
If less than 7 years has passed since the date of the gift, the gift is added to the total estate on death and if the total estate exceeds �325k (current figures) inheritance tax is payable (actually there is a sliding scale, so a gift given 6 years before death attracts less tax than one given 1 year before death).
It isn't a problem, and it isn't the receiver of the gift that pays the tax - it is the estate of the deceased person.
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