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JGM
JGM, Solicitor
Category: Scots Law
Satisfied Customers: 10650
Experience:  30 years as a practising solicitor.
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If a father gives his excess income to a daughter who looked

Customer Question

If a father gives his excess income to a daughter who looked after him, and tells her to put it into an account under her name, does she add it to the estate after his death, or share it with her sister? Or declare as a gift?
Submitted: 2 years ago.
Category: Scots Law
Expert:  JGM replied 2 years ago.
Thank you for your question.
If it was intended as a gift, it is not repayable but would be declared as a gift for IHT purposes for calculation of th gross estate.
If it wasn't intended as a gift but was put into an account in the daughter's name as a matter of convenience then it should be added to the estate and the net estate divided between all the beneficiaries.
Happy to discuss further.
I hope this helps. Please leave a positive response so that I am credited for my time.
Customer: replied 2 years ago.
Thank you for your answer.
If gifts are over £3000 from surplus income in a year can you use the allowance or do they need to be declared in full? Normally you would put gifts down net minus the annual allowance?
Can you explain what an excepted estate is? Is this an estate below IHT level with total gifts below £150,000.
When does council tax need to be paid again on the deceased home? There is a six month reprieve but if confirmation has still not been obtained do the executors have to pay the bill until it is?
Expert:  JGM replied 2 years ago.
Regular gifts from income do not need to be declared. See
https://www.gov.uk/inheritance-tax/gifts
An excepted estate – the gross estate for inheritance tax doesn’t exceed the excepted estates limit (currently £325,000 and linked to the level of the inheritance tax threshold).
OR
Exempt and excepted estate – (a) the gross value of the estate is less than £1,000,000 and (b) because all or part of the estate passes to the deceased’s spouse who must also be domiciled in the UK, or to a charity or other body qualifying as exempt from inheritance tax, after deducting liabilities and those exemptions only, the estate is less than the excepted estates limit.
In addition, for both categories all of the following conditions apply:
If there are any ‘specified transfers’ (see below), their total chargeable value doesn’t exceed £150,000.
If the deceased had made a gift of land or buildings, it was made to an individual and not to trustees of a trust or to a company and it didn’t exceed £150,000 in chargeable value.
If the estate for inheritance tax purposes includes assets held in a trust that are treated as part of the deceased’s estate, there is only one such trust and the total value of those assets doesn’t exceed £150,000.
If the estate includes any foreign assets, the total gross value of these doesn’t exceed £100,000.
The deceased didn’t give away any property whilst retaining the benefit of it.
The deceased had elected that the income tax charge shouldn’t apply to: (a) assets they previously owned in which they retained a benefit or (b) the deceased’s contribution to the purchase price of the assets acquired by another person but in which the deceased retained a benefit.
The deceased didn’t benefit from an alternatively secured pension fund.
The deceased didn’t benefit under a registered pension scheme where (a) the benefit was unsecured and (b) they became entitled to the benefit as a relevant dependant of a person who died aged 75 or over.
Council tax exemption is given for six months. Thereafter if the house isn't sold or transferrd the estate would be liabile to meet the payments.
Customer: replied 2 years ago.
The deceased did benefit from an alternatively secured pension fund but when I asked about this and they asked how old he was - over 90, they said tick the no box to the question about this. So even though the man did have his own company pension does that mean the estate which is below IHT is still exempt?
Expert:  JGM replied 2 years ago.
Yes
JGM, Solicitor
Category: Scots Law
Satisfied Customers: 10650
Experience: 30 years as a practising solicitor.
JGM and other Scots Law Specialists are ready to help you
Customer: replied 2 years ago.
The deceased had a joint current account with his daughter does half of that go on the inventory or the whole amount? If only half goes on the estate does that mean the other half belongs to the daughter?
The daughters have elected to keep the premium bonds in for a year. Are any wins after the death added to the inventory since they would be part of the estate being the deceased's investment?
Expert:  JGM replied 2 years ago.
Premium bond wins form part of the estate. Any substantial wins would have to be added to the estate by way of an Eik to the Confirmation. Small wins can just be treated as estate realised.
As far as the joint account is concerned, from a banking point of view the account is owned equally but from an estate point of view, the amount to go into the inventory is the amount contributd to the account by the deceased.
Customer: replied 2 years ago.
Thank you for your email. - I have one last point on the C5 form, question 6. The deceased did have an annuity and it now ends. The former wife now gets it. It is not very much. Is box NO ticked or yes. If yes, why does the IHT400 have to be filled in since overall the estate is not at IHT level?
Expert:  JGM replied 2 years ago.
Yes is ticked, in this case because HMRC want details of the life policies and annuity and the form for that is form IHT410 which is a schedule to IHT400.
Customer: replied 2 years ago.
Thank you for your response. Is it just the IHT410 form to be filled? Or the 400 as well? The estate is well below IHT. It was a pension annuity that the deceased had.
Expert:  JGM replied 2 years ago.
Both forms should be completed.

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