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taxadvisor.uk, Chartered Certified Accountant
Category: Tax
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Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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Sam In late 2014 my Mother sold her property and I sold

Resolved Question:

Hi Sam
In late 2014 my Mother sold her property and I sold my property. I used the proceeds of the sale from my property to purcahse a property which my Mother now lives in. The property is in my name and I pay the mortgage and all the bills.
My Mother is now intending to gift me £130,000 from the proceeds of the sale of her property. I will be using this as the deposit on a second property which it is also intended will be in my name. Will this 'gift' incur a tax liability. My mothers assets (inlcuidng this gift) are exceedingly unlikley to ever exceed £325,000.
Thank you Sam
Emma
Submitted: 2 years ago.
Category: Tax
Expert:  taxadvisor.uk replied 2 years ago.

Hello and welcome to the site. Thank you for your question.

I am another expert on this site and I am happy to help you with your question.
Would you like me to proceed?

Many thanks

Customer: replied 2 years ago.

Yes.

Expert:  taxadvisor.uk replied 2 years ago.

Thank you for your reply.

You state your mother's assets including this gift are exceedingly unlikely to exceed the threshold for inheritance tax, currently set at £325,000.

You should be mindful of the fact that it is all gifts made within 7 sevens of death are added back and not just this gift of £130,000 to ascertain whether the estate has exceeded the threshold for IHT.

If the net result is below the threshold then there is no tax payable on the gift.

There is some useful information on gifts and IHT here

http://www.which.co.uk/money/tax/guides/inheritance-tax-explained/inheritance-tax-planning-and-tax-free-gifts/

I hope this is helpful and answers your question.

If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.

Expert:  taxadvisor.uk replied 2 years ago.

Just, some clarification on gifts that would be added to assets in order to ascertain the estate worth are potentially exempt transfers and the gift of £130k would fall in this category.

You would exclude tax free gifts that are listed on the link I provided in previous posting.

Many thanks

Customer: replied 2 years ago.

Thank you very much for your help. Much appreciated.

Emma

Expert:  taxadvisor.uk replied 2 years ago.

Emma, thank you for your good words.

I hope the information provided was helpful and answers your question.

If you are happy and there are no more issues I will appreciate if you would kindly rate/accept the service I provided to ensure I get credited for it.

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