How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask TonyTax Your Own Question
TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15940
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
13905389
Type Your Tax Question Here...
TonyTax is online now

I was given a gift of money by my Dad 4 years ago. At that

Customer Question

I was given a gift of money by my Dad 4 years ago. At that time I used that money together with my money to buy a house. That gift made up about a quarter of the money, the rest being mine. My Dad has not lived at my house. My Dad recently died. Is the current value of my home now going to be counted in my Dad's estate for inheritance tax? Or is about a quarter of the current value of my home now going to be counted in my Dad's estate for inheritance tax?
Submitted: 1 year ago.
Category: Tax
Expert:  TonyTax replied 1 year ago.
Hi. Whatever the value of the gift was is what will be included in your late father's estate for Inheritance Tax purposes. Your late father's estate will use the nil-rate band of £325,000 first against gifts made in the seven years before his death in chronological order. Should the nil-rate band not cover the value of all the gifts made in the seven years before death then they will be liable to IHT at a maximum of 40%. However, from three years after a gift is made, taper relief applies which serves to reduce the IHT charge on the gifts remaining after the use of the nil-rate band. Hopefully, your father's estate will have enough assets to settle any IHT liability and only if it doesn't is there a possibility that you will be asked by HMRC to contribute the IHT on any part of the gift made to you by your father not covered by the nil-rate band. Take a look here for information on IHT and here for information on taper relief. I hope this helps but let me know if you have any further questions.