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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4973
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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My wife's father has sold his house and gifted us the majority

Customer Question

My wife's father has sold his house and gifted us the majority of this money and we have bought a house together. My father-in-law has not got his name on the deeds and may not live 7 years.
I believe that I an correct in thinking that we shall have to pay tax on this gift at 40% should he not live for 7 years, yet if he had left money of property to us in his will and the the amount was under the inheritance tax threshold we would not pay a penny.
What can we do to avoid this. Paying the gift back could be an option.
Submitted: 1 year ago.
Category: Tax
Expert:  taxadvisor.uk replied 1 year ago.
Thank you for your question.The gift to you is a potentially exempt transfer and falls under the seven years rule.In the event of death within the seven years, this gift would be added back to the estate to ascertain total estate value for IHT purposes.Provided the total wealth including the aforementioned gift remains within the threshold of £325,000 currently, there would be no IHT payable.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.
Customer: replied 1 year ago.
Thanks ..for clarification.
Expert:  taxadvisor.uk replied 1 year ago.
Thank you for your reply.I hope it is helpful and answers your question. I will appreciate if you would kindly rate my service/accept the service I have provided before you leave the site, to ensure I get credited for it by Just Answer.
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Expert:  taxadvisor.uk replied 1 year ago.
Hi
Just checking in. How did things turn out?
Many thanks
Customer: replied 1 year ago.
The answer you gave was very helpful .. many thanks
Expert:  taxadvisor.uk replied 1 year ago.
Thank you for your good words. Best wishes

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