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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15946
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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If I gift my daughter money will IHT be payable even if

Resolved Question:

If I gift my daughter money will IHT be payable even if amount is below £325k threshold *(and I die within 7 years).If I loan her money, then no IHT payable if estate is below £325 (*£650 as I am a widow)?
Submitted: 1 year ago.
Category: Tax
Expert:  TonyTax replied 1 year ago.
Hi. In the case of a gift, should you die within 7 years of making it, its value will remain in your estate for IHT purposes. However, as you will read here, the nil-rate band will first be used against gifts made in the 7 years before death in chronological order so it would need to be large gift to give rise to an IHT charge. Taper relief will also increasingly reduce the exposure after 3 years. If you lend money to your daughter and you die before it is repaid, it will be an asset of your estate and your executors may demand repayment unless you stipulate otherwise in your will in which case it will be a legacy to your daughter which will use up some of your nil-rate band. So, the outstanding loan will have an effect one way or another on your IHT position. I hope this helps but let me know if you have any further questions.
Customer: replied 1 year ago.
Thanks. Am I correct I will have £625k allowance as I am a widow none of which was used by my husband on his death?
Expert:  TonyTax replied 1 year ago.
That's correct. Look here for information on that.
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