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JGM
JGM, Solicitor
Category: Scots Law
Satisfied Customers: 11689
Experience:  30 years as a practising solicitor.
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Are gifts taken into account when there are legal rights. This

Customer Question

Are gifts taken into account when there are legal rights. This involves two sisters?
Submitted: 2 years ago.
Category: Scots Law
Expert:  JGM replied 2 years ago.
Thank you for your question.
-Could you explain your situation a little more?
Customer: replied 2 years ago.
Do gifts given to one sister affect the legal rights situation when sorting out an estate? You have to list any gifts on the c1 and c5 forms.Say if one sister has received more than the other in the last seven years are these added up and taken off the total amount shared between them after a death? The other sister received monetary gifts before the seven years.
Expert:  JGM replied 2 years ago.
No the gifts aren't relevant to anything other than whether they have to added back in when calculating any liability of the estate to pay Inheritance Tax.
They are absolutely irrelevant to the division of the estate. All that is relevant there is what estate there was at the date of death less any debts which of course includes taxes.
Customer: replied 2 years ago.
Thanks for your message. What exactly are legal rights? How does this work? In the gift list do you need to say what each gift is and Wyoming it went? Do you put the net amount down or the gross and show the £3000 allowance taken off?
Expert:  JGM replied 2 years ago.
Legal rights are rights available to spouses or children. Under Scots law you can't cut out your family completely by making a will. Notwithstanding any will, children are entitled to claim half of moveable estate between them of there is no spouse. If there is a surviving spouse the children can claim a third of moveable estate between them and the spouse a further third.
Moveable estate is everything except land and buildings.
Any gifts are shown for what they are in the HMRC form. The allowances will be taken account of in the form as well. The executor has to follow the instructions in the C1 form so as to calculate any tax due.
Customer: replied 2 years ago.
When you say tax due, do you mean inheritance tax. The estate is no way near that level even taking into account gifts so do you still need to put the value of the gifts down on the C1 and do you say who received the gift and what it was.
Also the decease's personal annual tax form has been compiled and sent off and the person died two months after the end of the tax year so would they be due a tax rebate and if they were would you have to wait for info on that before completing these forms?
Expert:  JGM replied 2 years ago.
The value of the gifts are declared on the estate form, not the people to whom the gifts were made.
You should do the death to HMRC. They will calculate whether a tax rebate is due. You don't have to wait for that to complete the estate inventory. If the person hadn't used up all their personal allowances for the tax year something is likely to be due back.