.. Obviously the estate pays the inheritance tax.
However, the government web site says
"If someone gives you a gift and they do not survive for 7 years after making the gift, you would only be liable to pay Inheritance Tax on that gift if the value of the estate - including the gift - is over the Inheritance Tax threshold (£325,000 in 2014 to 15 tax year) and there is not enough money in the estate to pay the Inheritance Tax.
However, if all the gifts made by that person during the 7 years before they died add up to more than the Inheritance Tax threshold (£325,000 in 2014 to 15 tax year) - just the gifts themselves not the rest of the estate - Inheritance Tax will be due on all of the gifts that brought the total above the threshold. In this case, you as the donee will usually have to pay the tax due on your gift."
So my interpretation of this would be that sister should pay inheritance on the gifts if the estate alone is over the threshold.
Is this a correct interpretation?
..so I need to sell the house .. as the bank accounts have been wiped clean.